Venezuela unveils new oil, mining deals under US blessing

Washington and Caracas unveiled new agreements Wednesday for oil and gold extraction in the South American country on the sidelines of a G20 summit hosted by the United States.

US oil company Continental Resources, founded by Howard Hamm, signed a memorandum of understanding with the Venezuelan national oil company PDVSA to operate and develop a block in the prolific Orinoco heavy-oil basin.

Hamm, a close ally of President Donald Trump, was joined by Venezuelan officials and top Trump administration appointees at a ceremony at the G20 summit in Houston to mark the latest ripple effect from the US toppling of then-Venezuelan president Nicolas Maduro in January.

Energy secretary Chris Wright called the oil project “a milestone deal in the US-Venezuelan relationship”, as well as “a milestone deal in making the Western Hemisphere the centre of the global energy system”.

Officials also announced a new accord involving Henney Capital to develop gold in Venezuela.

The oil tract, the Ayacucho 2 Block, encompasses approximately 126,000 acres and holds an estimated 30 billion barrels of oil, according to a Continental press release.

That’s equivalent to about 10% of Venezuela’s proven reserves.

Hamm, who is credited with directional drilling and fracking innovations behind the US shale boom, is known as a fierce critic of environmental regulations. Forbes estimates his fortune at US$19 billion.

The announcement comes on the heels of the Sept 2 agreement sealing a controversial plan granting the US control of about one-fifth of Venezuela’s huge reserves.

That deal, described by Trump as the “biggest oil deal in world history”, has prompted criticism that Venezuela’s interim president Delcy Rodriguez has signed away Venezuela’s resource sovereignty.