BLACK SHEEP WHISTLEBLOWER
Well, well, well.
Or maybe more appropriately:
WELL, WELL, WELL, WELL, WELL…
Because if what was announced today actually gets developed anywhere near the scale being described, somebody is going to be drilling a hell of a lot of oil wells.
President Donald Trump announced Friday that the United States has entered into what he called “THE BIGGEST OIL DEAL IN WORLD HISTORY” with Venezuela, giving the United States majority control over more than 65 BILLION BARRELS of proven Venezuelan oil reserves.
Let that number sink in.
65,000,000,000 barrels of oil.
This isn’t some little exploration prospect where somebody drills three wells, shoots a bit of seismic and hopes for the best.
Reports indicate the agreement involves the development of 17 strategic Venezuelan oil fields, including assets associated with the massive Orinoco Belt and Lake Maracaibo regions.
And according to Secretary of State Marco Rubio, the arrangement is expected to attract nearly $100 BILLION in private investment.
So when I read this story, the old oil-and-gas guy in me immediately thinks:
Drilling rigs.
Directional drilling.
Geologists.
Geophysicists.
Engineers.
Completions.
Pipelines.
Facilities.
Service companies.
Roads.
Camps.
Heavy equipment.
Thousands upon thousands of jobs.
And — assuming this thing actually proceeds on anything close to the scale being advertised — one absolutely enormous redevelopment and drilling program.
Venezuela isn’t short of oil.
It has more than 300 billion barrels of proven reserves, generally regarded as the largest proven petroleum reserve base in the world.
Its problem has been getting that oil efficiently and consistently out of the ground after years of deteriorating infrastructure, political instability, sanctions, underinvestment and the exodus of expertise and capital.
That means you don’t simply sign a piece of paper Friday afternoon and have another few million barrels of oil magically arriving at Gulf Coast refineries Monday morning.
Somebody has to go into those fields.
Somebody has to evaluate them.
Somebody has to rehabilitate the infrastructure.
Somebody has to drill.
Somebody has to complete those wells.
Somebody has to build and repair the gathering systems and processing facilities.
And somebody has to move the oil.
That’s where this story could become absolutely enormous for the North American energy industry.
There are still major unanswered questions. The complete financial and legal structure of the agreement has not yet been publicly laid out, and industry observers are already pointing to Venezuela’s infrastructure problems, political risks and legal complications.
So don’t start ordering drilling rigs based on a headline just yet.
But 65 billion barrels under majority U.S. control, 17 strategic oil fields and potentially $100 billion in private investment?
Yeah.
As somebody who spent a career around exploration and resource development, that gets my attention.
Because eventually somebody has to turn those barrels on a government spreadsheet into barrels coming up a wellbore.
And THAT requires people who know how to find it, drill it, complete it, produce it and move it.
WELL, WELL, WELL…
Looks like there could be a whole lot of wells to drill.
And somewhere tonight, I’d wager there are a few drilling contractors, oilfield-service executives, petroleum engineers and geologists reading exactly the same news and reaching for their calculators.
Follow the oil. Follow the money. And definitely follow the drilling rigs.
— BLACK SHEEP
Original story:
https://apple.news/AZZHPI5jmRH63dJW1X9QkZQ
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