Venezuela Awards Loran Offshore Gas Field to BP Consortium

Venezuela's award of an offshore natural gas license to a consortium of BP, XRG, and UCC Oil and Gas Holding marks a pivotal reopening of the country's energy sector to international capital. Following legislative overhauls allowing direct private operation and direct commercialization, the move enables foreign operators to tap into over 4 trillion cubic feet of gas. For Gulf Coast and Latin American energy markets, the reactivation of Venezuelan production shifts regional heavy crude and gas flows, directly impacting trade dynamics, investment distribution, and market competition for state producers like PEMEX.  

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Venezuela signed an agreement transferring participation rights for Phase II of the non-associated natural gas exploration and exploitation license for the Loran field, located in Block 2 of the Deltana Platform, to a consortium comprising BP Exploration Caribbean, UAE-based XRG PJSC, and Qatar-based UCC Oil and Gas Holding LLC. Located along the maritime boundary with Trinidad and Tobago in the Deltana Platform, the field contains over 4Tcf of proven gas resources.

Minister of Petroleum Paula Henao authorized state-owned PDVSA Gas to transfer the equity interests during a ceremony led by Acting President Delcy Rodríguez. Representatives from the participating companies attended the signing, including Meg O'Neill, CEO, BP; Abdulla Sami Alshamsi, Business Development Director for International Gas, XRG; and Erik Keskula, Oil and Gas Holding Director, UCC.

The Loran field contains over 4Tcf of proven gas resources and forms part of the broader Loran-Manatee cross-border gas accumulation along the maritime boundary between Venezuela and Trinidad and Tobago. Under the agreement, BP, XRG, and UCC will each hold an equal working interest share, with BP serving as the operator for the development.

"Venezuela holds significant gas resources and has the potential to play a greater role in meeting regional and international energy demand. Our entry through Loran reflects XRG's strategy to invest with partners in advantaged resources with access to established infrastructure and clear routes to market,” said Mohamed Al Aryani, President of International Gas, XRG. He added that connecting these resources to established infrastructure will help support responsible development, enhance regional energy integration, and generate long-term value for Venezuela and its local partners.

Acting President Rodríguez marked the agreement as a historic milestone, noting that it brings much-needed momentum to gas production in the Loran field after 23 years of efforts. "I congratulate this historic moment and thank you for reaching this important agreement for Venezuela and the international energy community,” Rodríguez added.

O'Neill expressed satisfaction with the signing, emphasizing the company's commitment to accelerating the development of the natural gas resource to support Venezuela's economic and energy needs. “The award of the Loran Phase II licence is an important step forward. It builds on the strong collaboration we have established with the Government of Venezuela and our partners and reflects the progress we have made together. BP has a long-standing presence in the region and deep experience developing major gas resources. Together, these agreements provide a strong foundation to progress Venezuela's offshore gas potential and unlock the next phase of development," O’Neill said.

Alongside the Loran Phase II license, BP and the Venezuelan government signed a separate memorandum of understanding covering the Carúpano East Block in the Caracolito sub-basin of the Mariscal Sucre maritime area, establishing a framework to evaluate further offshore exploration opportunities.

XRG noted that its participation in Loran Phase II remains subject to definitive license and development arrangements, customary governmental and regulatory approvals, and compliance with all applicable international sanctions. The entry aligns with XRG's broader strategy to establish an integrated gas and LNG platform across Latin America and the Atlantic Basin.

Regulatory Shifts in Venezuela’s Hydrocarbons Framework

While non-associated offshore gas fields like Loran operate under Venezuela’s Gaseous Hydrocarbons Law, the country is simultaneously executing a parallel overhaul of its primary liquid hydrocarbons sector. Following Maduro's capture, then-Vice President Rodríguez assumed the presidency as acting head of state. On Mar. 25, 2026, Rodríguez presented details on this strategy during an address at the FII Priority Summit in Miami, outlining the legislative framework for foreign investors.

Central to this transition is Venezuela's reformed Hydrocarbons Law, enacted in late January 2026. The updated legislation allows private companies to undertake primary exploration and production activities, manage operational risk, and export crude directly to international markets. Under the commercialization provisions, foreign investors and joint ventures hold direct control over product sales, distribution, and commercialization channels rather than relying exclusively on state oil company PDVSA. Furthermore, the law establishes framework parameters for dividend division between state entities and private capital, alongside executive authority to adjust tax rates and royalties. To provide operational guarantees, the framework also incorporates international arbitration clauses for foreign operators.

On the operational front, national energy operations reached zero fuel imports, supplying domestic fuel consumption through national production following the easing of naval blockades. Maintenance backlogs persist across refineries and storage facilities, and the administration plans to use the reformed Hydrocarbons Law to secure engineering services and capital for facility rehabilitation.