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Venezuela Plans to Remap Its Offshore Oil Territory, Escalating Tension With Exxon

Venezuela will remap its Caribbean oil and gas prospects in a move that could further stoke a century-long border dispute with Guyana and collide with Exxon Mobil Corp.’s venture in the region, people with knowledge of the plan said.

The seismic survey is planned for the coming months and will include an eastern area of Venezuela that borders Guyana, the people said, asking not to be named because the plan isn’t public. Officials at state-owned Petroleos de Venezuela SA, or PDVSA, declined to comment.

Venezuela reignited the old border dispute last month after intercepting two ships conducting seismic studies for Exxon as the oil major prepares to develop giant deep-water reserves off the coast of Guyana. Venezuela has mapped its offshore territory for oil deposits in the past, but some areas remain uncharted. The new survey will also include areas bordering Caribbean islands such as Grenada and Saint Vincent.

“More surveys are pending to identify commercially viable options for gas,” said Antero Alvarado, a managing partner at consulting firm Gas Energy Latin America. “Past PDVSA studies ignored identifying gas deposits because the focus was always on oil.’’

Following an encounter last month with the Venezuelan navy, one of the two ships hired by Exxon will conduct seismic surveys in Guyanese waters away from the border, while the other will no longer be used, the Irving, Texas-based company said Monday.

Guyana, which has U.S. backing for its ownership claim over the waters, said Venezuela broke international law. Venezuelan President Nicolas Maduro has said the territory belongs to his country and vowed to defend it “at any cost.”

Maduro issued a decree a week after the interception stating Venezuela’s continental shelf is open for oil exploration, although no investment plans have been announced for the area yet.

PDVSA’s offshore division produces mainly gas from the western coast in a partnership with Italy’s ENI SpA. It also has several inactive oil and gas projects in the east, near Trinidad and Tobago and Guyana. Three of them are in partnerships with Norway’s Equinor ASA, Chevron Corp. and France’s Total SA.
Source: Bloomberg

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