U.S. billionaire's firm wins 30-billion-barrel Venezuela field
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Harold Hamm (Photo: Reuters)
Continental Resources, the company founded by billionaire and shale-oil pioneer Harold Hamm, has agreed to explore for oil in Venezuela amid the Trump administration's calls for U.S. companies to help revive the country's oil sector, Bloomberg reported on Sept. 16.
Continental Resources will enter the South American country's market for the first time, planning to operate and develop the Ayacucho 2 field in the Orinoco Belt, a region rich in heavy crude.
The Ayacucho 2 field is located in Venezuela's Anzoátegui state and spans roughly 126,000 acres, with reserves estimated at 30 billion barrels of oil.
The area was designated by Venezuelan state oil company Petróleos de Venezuela S.A. (PDVSA) for joint production operations more than 30 years ago, but drilling never took place there.
Continental signed a memorandum of understanding with PDVSA and plans to finalize a long-term agreement within weeks.
The deal, brokered by Hamm — a major backer of President Donald Trump — adds to a string of recent agreements aimed at boosting oil production in Venezuela.
Continental Resources CEO Doug Lawler said oil production is expected to begin in about 18 months.
Hamm, one of the oil industry's most ardent Trump supporters, was among the first to apply horizontal drilling to extract oil from shale rock, a technique that drove the surge in production that made the United States the world's largest oil producer.
"The US government negotiated for a 35% stake in Venezuelan entrepreneur Alejandro Betancourt’s North American Blue Energy Partners, a privately held company granted 100-year deals in 17 Venezuelan oil fields," Bloomberg reported. "Betancourt is a contentious figure in Venezuela, but the Trump administration has defended its decision to partner with the investor."
As previously reported, President Donald Trump said on Aug. 28 that the United States had struck the "biggest oil deal in world history" with Venezuela.
He said the deal gives the United States a controlling stake in more than 65 billion barrels of Venezuela's proven oil reserves, more than doubling U.S. oil reserves, significantly expanding oil supply and substantially lowering gasoline prices for Americans.
On Aug. 28, Axios, citing two U.S. officials, reported that the Trump administration was negotiating with Venezuela's transitional government to acquire a stake in the South American country's vast oil resources.
Trump began privately discussing ways to secure a stake in Venezuelan oil fields even before he authorized the Jan. 3 arrest of Venezuelan dictator Nicolás Maduro, who faces narco-terrorism charges in New York.
Venezuela's oil sector has been in relative decline due to the legacy of mismanagement under Maduro and his predecessor, Hugo Chávez, who came to power in 1999.
U.S. Energy Under Secretary Kyle Haustveit said that about half of the oil Venezuela currently produces is exported to the United States.
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