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US oil billionaire signs agreement with PDVSA despite sanctions

US oil billionaire signs agreement with PDVSA despite sanctions

A company founded by a billionaire Texas oilman announced a deal Wednesday with Venezuela’s state oil company to clean up five aging oil fields, days after the Biden administration put the brakes on sanctions relief over concerns about the country’s justice system. upcoming presidential elections.

GNL Energy Group is a Canadian-listed company that produces natural gas in Colombia. It was formed last year from a merger with a company owned by Rod Lewis, a legendary Texas game hunter who Forbes magazine once called “the only gringo allowed to drill in Mexico.”

Under the agreement announced Wednesday, state-owned PDVSA awarded contracts to LNG to take over production and develop two oil fields in eastern Venezuela that currently produce around 3,000 barrels of crude oil per day.

LNG said the deal was implemented as part of sanctions relief announced by the U.S. government last year in support of an agreement between President Nicolás Maduro and his opponents to hold competitive presidential elections this year. Last week, the Biden administration reimposed sanctions as hopes for a democratic opening in Venezuela fade.

But the White House left open the possibility that companies would apply for licenses that would exempt them from the restrictions, attracting investment in a country with the world’s largest oil reserves at a time of growing concerns about energy supplies following Russia’s decision could. Invasion of Ukraine.

Aside from Chevron, which has operated in Venezuela for a century and received its own license in 2022, few American companies have sought to make major capital investments in the high-risk South American country in recent years amid concerns about government seizures and sanctions Corruption.

“This will be a test of U.S. sanctions whether they get a license or not,” said Francisco Monaldi, an expert on Latin American energy policy at Rice University’s Baker Institute.

LNG said in a statement that it “intends to operate in full compliance with applicable sanctions,” but declined to comment further.

Lewis, who has a net worth of $1.1 billion according to Forbes, became rich in the 1980s as a natural gas explorer near his home in Laredo, Texas. His company, Lewis Energy Group, was the state’s fourth-largest natural gas producer last year.

In 2004, Lewis won a contract from Mexico’s tightly controlled energy industry for nearly 100,000 acres (400 square kilometers) just across the border from his South Texas facilities. He began investing in Colombia in 2003.

With information from AP

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