BP, XRG Sign Venezuela Loran Gas Deal as Thaw Builds

Big oil companies are returning to the table in Venezuela, signaling a potential thaw in relations with the United States. The latest development is the signing of a gas deal that grants oil giant BP a license to develop the second phase of the offshore Loran gas field, in partnership with Gulf-based companies XRG and UCC. This modest agreement, on paper, is noteworthy considering the sanctions and isolation the country has faced for years.

Phase 1 of the Loran field has already begun, with gas flowing, while Phase 2, covered by the new license, aims to extract more gas from the field. The field, located offshore Venezuela, holds over 4 trillion cubic feet of recoverable gas, enough to significantly impact the energy supply of the region for years. Notably, the gas field extends beyond Venezuela's borders into Trinidad and Tobago, where it is known as the Manatee field.

Since cross-border fields require cooperation between countries, this deal is particularly attractive, as pipelines and plants already exist nearby to transport the gas.

The other parties involved, XRG and UCC, are unfamiliar to many readers. XRG is the international investment arm of Abu Dhabi's state oil company, ADNOC, and this marks its first venture into Venezuela. UCC is the oil and gas unit of Qatar's large conglomerate, UCC Holding. BP, XRG, and UCC will each hold an equal one-third share in the field.

However, there are a couple of cautions to keep in mind. First, the deal still requires regulatory approvals, government consent, and compliance with international sanctions rules. Second, this agreement builds on a memorandum BP signed with Venezuela back in April 2026, indicating a trend of increasing cooperation between the two countries.

In other news, Venezuela's government signed a deal with Argentine engineering firm IMPSA to revive the Tocoma hydroelectric plant. The first stage will add about 160 megawatts to the grid within 90 days, helping to alleviate blackouts that many Venezuelans still face. The US State and Energy Departments have endorsed the project, signaling support for the initiative. The partners aim to add hundreds of additional megawatts in the future, although their timelines extend beyond a year.