Galp Energia and Petróleos de Venezuela, S.A. (“PDVSA”) have signed a memorandum of understanding to study the development of joint projects in the energy sector and the establishment of forms of cooperation between the two companies including the possibility to develop exploration, production and oil and gas procurement operations.
The agreement provides for information and experience to be shared relating to the development of both countries’ energy sectors and for the exchange of specialists providing technical assistance for the execution of studies and projects in the energy sectors of Portugal, Venezuela or third countries.
The agreement also covers the identification of business opportunities allowing the Venezuelan company to strengthen its presence in Europe and to promote joint cooperation, thereby maximising synergies between the operations of PDVSA and other European oil companies.
The short-, medium- and long-term projects to be examined include the following:
• The possibility for Galp Energia to join oil exploration & production projects, currently under way in Venezuela;
• Galp Energia’s participation in the Magna Reserva project consisting of the studies for quantifying and certifying oil reserves in the Orinoco Oil Belt as well as developing and processing those reserves;
• Performance of studies allowing to evaluate the possibility for Galp Energia to participate both in the Mariscal Sucre Project, which aims to develop Venezuela’s offshore gas, and the terminal to liquefy natural gas which PDVSA plans to build at the Gran Mariscal Ayacucho Industrial Complex;
• The possible investment in the strategic storage of crude from Venezuela at Sines, for the purpose of supporting marketing operations in Southern Europe;
• The possibility for Venezuela to become a relevant supplier of crude to Galp Energia.
Venezuela is the country in the western world with the largest volume of proven reserves, estimated to be over 77 billion barrels excluding the Orinoco Oil Belt. Companies such as Chevron, Total, Statoil, BP and ENI are currently PDVSA’s partners in various projects in Venezuela. PDVSA estimates that, following the Magna Reserva project, the Orinoco Oil Belt’s reserves may prove to be as large as 235 billion barrels.
In its capacity as the Portuguese benchmark oil and gas operator, Galp Energia is actively searching for business opportunities to secure the long-term procurement of oil and gas required to supply its Portuguese and Spanish markets.
Galp Energia believes that the Memorandum signed today is the first step towards the establishment of a long-term relationship between Galp Energia and PDVSA that will obviously generate benefits for both parties.