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Update: Repsol Signs MoU With Venezuela Government, PDVSA to Assess Horcon Development Potential

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(Updates throughout to add details from Repsol's statement.)

Spanish energy major Repsol said in a statement it signed a preliminary agreement with Venezuela's Ministry of Hydrocarbons and state-owned oil company PDVSA on Wednesday to examine the development potential of Horcon area, located southeast of Lake Maracaibo.

The development was reported earlier in the week by multiple media outlets.

Horcon area falls between the Barua and Motatan fields, which are part of Repsol's Venezuelan assets portfolio. The company's Venezuelan assets portfolio also includes the oil-producing fields of Petroquiriquire and Petrocarabobo, and the Cardon IV gas asset, Repsol said in a statement.

The agreement was signed during a meeting between Acting President of Venezuela Delcy Rodriguez, Venezuela's Minister of Hydrocarbons Paula Henao and the representatives of Repsol and PDVSA.

"The meeting also reviewed the operational progress of Repsol's assets in Venezuela and the investments committed to ensure the continuity and growth of activity, as well as the payment mechanisms associated with existing agreements and the crude cargo schedule planned for the coming months," the statement added.

As part of the agreement, the parties also intend to further study offshore gas opportunities in Venezuelan waters and gather additional reservoir data.

According to multiple media reports on Tuesday, the new agreement could add about 20,000 barrels per day of crude output.

PDVSA President Hector Obregon said the companies see fresh exploration potential in an area where they already operate the Petroquiriquire joint venture. The project could lift crude output to about 60,000 b/d from the current production of roughly 40,000 b/d.

After recently taking over as operator of the Petroquiriquire venture, Repsol is targeting a 50% increase in production over the next 12 months and aims to triple output within three years, according to the reports.

In March this year, Repsol and Eni, which own a 50% stake each in the Cardon IV asset, signed an agreement with Venezuelan authorities and PDVSA to ensure natural gas production at the asset through 2026 and strengthen long-term operations, according to Repsol's statement.

In mid-April, Repsol signed another deal with Venezuela's Ministry of Hydrocarbons and PDVSA, allowing it to regain operational control and boost oil production at the Petroquiriquire field, conditional upon the fulfillment of certain conditions. Repsol owns a 40% interest in the asset, while PDVSA owns the rest. The agreement also aimed to improve payment mechanisms, and reinforce Repsol's operating framework in Venezuela under a 2023 agreement, the statement added.

has reached out to PDVSA for comment.

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