UK oil companies likely to push for Venezuela involvement, Lord Browne says

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UK OIL AND GAS companies are likely lobbying the government to secure a role in redeveloping Venezuela’s oil and gas assets following the US military’s abduction of the country’s former president Nicolás Maduro, former bp CEO John Browne has said.

Speaking on BBC Radio 4’s Today programme yesterday, Browne, who led bp from 1995 to 2007, said he would “of course” already be making attempts to lobby the government for opportunities in Venezuela if he were still in charge.

“Having options for business in different parts of the world is a good thing to have,” he said, adding that UK oil companies would “want to get involved fairly quickly”.

Speculation grew over the weekend after US president Donald Trump said he hoped American companies could take over Venezuelan oil assets following the military intervention in Caracas. Since Hugo Chávez came to power in 1999, the country’s oil assets have been controlled and operated by state-owned PDVSA with very few concessions offered to foreign companies.

Browne said PDVSA “used to have a tremendous skill base” but that “today there’s clearly a lack of skills, lack of investment, lack of infrastructure”. Venezuelan oil production has fallen from around 3.5m boe/d in the 1960s and 70s, when it was controlled by US and UK companies, to 1m boe/d today.  

Although Venezuela’s onshore deposits of heavy crude oil are the largest proven reserves in the world, analysts believe it could be up to a decade before production at typical global standards can be achieved. “People underestimate the time it takes to do things,” Browne said. “You might get some quick pickup of a little production, but equally it may go backwards while people are reorganising.” Consultancy Wood Mackenzie estimates that every 500,000 boe/d of additional production could require up to U$20bn of investment.

bp, along with Shell, declined to comment.