Under Venezuela's previous hydrocarbons law, all oil projects were operated jointly by PDVSA and its partners. Some companies exerted more influence than others in decision-making processes.
A reform approved in January now allows foreign firms to operate fields independently and increase their equity stakes. These pacts remain provisional until the Ministry of Hydrocarbons issues new contract templates and definitive agreements are signed.
Many foreign companies are seeking greater influence over the operational and financial decisions of their projects, even as minority partners. Firms like Repsol desire enhanced governance to ensure the repayment of billions of dollars in outstanding debt.
The Repsol deal, announced Thursday, includes plans to triple production in Venezuela within three years and guarantee adequate payment mechanisms. This has been a key issue preventing most joint ventures from generating cash flow for years due to U.S. sanctions, which are now being eased.
"This agreement underscores Repsol's commitment to Venezuela, where we have operated without interruption since 1993," said Francisco Gea, Executive Director of Exploration and Production.
"We have the resources and the technical, operational, and human capabilities on the ground to increase our production in the country."
Repsol's current gross oil production in Venezuela stands at approximately 45,000 barrels per day.
After the United States began easing sanctions against Venezuela's energy sector in January, it issued general licenses allowing for the initiation of oil and gas projects that could contribute to the reconstruction of the OPEC member's industry.
Last month, Repsol and Italy's Eni signed agreements with Venezuela to secure gas production at the Cardón IV field, a 50-50 joint venture between the two companies.
(Reporting by Marianna Parraga, Disha Mishra, and Pietro Lombardi)
