Eneva Says Venezuela Needs Regulatory Reform to Unlock Its Gas Reserves
Brazil’s Eneva SA wants to convert Venezuela’s underused natural gas into other forms of energy. The company believes this model would work much better if the country simplified its energy regulations.
Eneva’s Plan: Turn Gas Into “Bankable Products”
The Rio de Janeiro-based company is looking at mature oil fields in Venezuela, where it would put the associated natural gas to commercial use. For larger and more capital-intensive greenfield projects in the Orinoco oil belt, it is seeking partners.
Ivan Betancourt, Eneva’s director general for Venezuela, shared the plan in an interview at a sold-out oil and gas conference in Caracas this week. He said the gas could be developed into a range of “bankable products”, including:
- Petroleum liquids
- Electricity
- Methanol
- Industrial gases
Why Regulation Is the Sticking Point?
Betancourt said Venezuela needs to “harmonize the regulatory environment” if it wants to revive its energy sector. He was referring to the country’s separate sets of rules for hydrocarbons, gas and electricity.
A Different Type of Gas Than Brazil’s
In Brazil, Eneva specializes in developing remote dry gas deposits to generate electricity. Most Venezuelan gas is different: it is rich in liquids. Betancourt called that “a challenge but also a significant opportunity,” and said the model “is going to be beneficial for everybody.”
He added that Eneva is open to working alone “where it makes sense and the size is right.”
Talks With PDVSA and a Possible MOU
Eneva is in direct talks with state-owned Petroleos de Venezuela SA (PDVSA) and hopes to sign a memorandum of understanding by the end of the year. Betancourt described PDVSA as “very receptive.”
The Orinoco Belt: Big Reserves, Big Challenges
As a second option, Eneva is exploring a “strategic partnership” in the Orinoco heavy oil belt, known locally as the Faja and considered one of the largest oil and gas deposits in the world.
Betancourt cautioned against expecting quick results. In his words, the Faja holds a significant amount of reserves, but technically it is among the most complex places to produce. Large volumes may come over time, he said, but only with heavy investment, technical capability and technology. One specific hurdle is getting access to a blendstock, which is needed to transport and process the belt’s extra-heavy crude.
Eneva has also signed a non-binding, non-exclusive agreement with oilfield services company Halliburton Co. to explore opportunities in Venezuela together.
Why Eneva Is Starting With Mature Fields?
Developing the Faja would take thousands of wells, plus significant capital and expertise. For that reason, Eneva is looking first at a mature field with lower production. Betancourt said the economics “may work better in the short term” in fields around Lake Maracaibo in the west or North Monagas in the east, where infrastructure and logistics are already close by.
