U.S. License Clears Shell Dragon Gas Project, Repsol Eyes 50% Venezuela Output Boost
U.S. Treasury has issued a license enabling Shell to advance its Dragon natural gas project in Venezuela and resume exploration after sanctions. The broader permit also allows Repsol to boost Venezuelan oil output by over 50% in 12 months and target a threefold increase within three years.
1. U.S. Treasury Grants Venezuela Exploration License
The Office of Foreign Assets Control issued a general license allowing foreign companies to operate directly in Venezuela’s oil and gas sector. The permit enables Shell and peers to resume exploration and production activities after years of sanctions-driven restrictions.
2. Shell Advances Dragon Gas Project
Under the new license, Shell can recommence fieldwork on its Dragon gas project on Venezuela’s northeast coast. The company expects exploratory drilling to begin within months, aiming to integrate additional gas volumes into its global supply portfolio.
3. Repsol Targets 50% Output Growth, Threefold Expansion
Repsol plans to lift its Venezuelan oil production from 71,300 barrels of oil equivalent per day by over 50% in the next 12 months and triple output within three years. Management views these increases as pivotal for meeting European gas demand and securing repayment of €4.55 billion in outstanding receivables.
4. Financial and Market Implications
The renewed authorization could unlock significant cash flows from Venezuela’s vast reserves, bolstering Shell’s gas segment and Repsol’s oil revenues. Shares of both majors rose in early trading, reflecting investor optimism around resumed Venezuelan operations.