Venezuela has awarded a license to British energy major bp, UAE-based XRG and Qatar-based UCC Holding to explore and develop the second phase of the Loran offshore natural gas field. The agreement represents another step in Caracas’ efforts to attract international investment, expand gas production and revive the country’s energy sector.
According to bp, Venezuela’s acting President Delcy Rodríguez announced the license as the government seeks to place greater emphasis on natural gas development. The second phase of the Loran field is estimated to contain up to 4 trillion cubic feet (tcf) of recoverable natural gas.
bp will operate the project in partnership with XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), and UCC Holding. The three companies will hold equal interests in the development, creating a joint international partnership to advance the offshore project.
The award is part of Venezuela’s broader strategy to increase foreign participation in its energy industry. Caracas has introduced reforms designed to make the sector more attractive to international companies with the financial resources, technology and technical expertise needed to develop complex oil and gas projects.
The Loran field is estimated to contain approximately 7.3 tcf of total gas reserves. Its second phase is expected to unlock access to as much as 4 tcf of gas, giving the project significant potential to strengthen Venezuela’s natural gas supply.
The development could also have regional implications because the Loran field is connected to Trinidad and Tobago’s Manatee gas field. This connection could support greater regional cooperation, infrastructure integration and future gas exports, depending on production and commercial development plans.
Venezuela had previously awarded Shell a license to develop the first phase of the Loran field. The latest agreement therefore expands the country’s efforts to bring international energy companies into its offshore gas sector.
The move highlights Venezuela’s intention to capitalize on its substantial natural gas resources while diversifying its energy industry beyond crude oil. If the project advances as planned, increased domestic and regional gas availability could support industrial activity and improve Venezuela’s position in the regional gas market.
Product & Chemical Commodity Price Impact
The development is bullish for Venezuela’s natural gas production potential, but the immediate impact on international chemical commodity prices should remain limited because the additional gas supply will take time to reach the market. Over the longer term, higher Venezuelan gas availability could increase feedstock availability for methanol, ammonia, urea and other gas-intensive chemicals, potentially lowering production costs and easing upward price pressure in regional markets. Greater gas availability could also support petrochemical feedstocks and reduce supply tightness. However, infrastructure requirements, project timelines and export constraints could delay these benefits. Therefore, near-term chemical prices are likely to remain largely unaffected, while longer-term prices could face moderate downward pressure.
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