Energy-focused Formentera is in discussions with international service providers to bring oil drilling rigs into Venezuela, managing partner Blake London said.
Only two onshore drilling rigs were active in Venezuela at the end of July, according to data from oil service provider Baker Hughes, which is putting a ceiling on production capacity in the country, currently around 1.25 million barrels per day, according to official numbers.
Many foreign oil service providers have found obstacles to importing specialized oil equipment, including permits and ground transportation, but they are working to move some from other countries while in talks with the Venezuelan government to ease the process, executives said at the conference.
Venezuelan oil minister Paula Henao spoke earlier at the conference, urging companies to invest in the country and help expand its supply chain to ensure that oil production is sustainable and profitable over time.
Still, oil majors including ExxonMobil (XOM.N) and ConocoPhillips (COP.N) have not rushed to return to Venezuela, saying more work needs to be done to protect contracts and investments.
Venezuela presents a major opportunity, but significant challenges remain, including constraints on power supply and the supply chain in the country, said David Reed, executive vice president of Americas at service provider Weatherford.
"Legislation, contracts, permits and everything else. These are all going to create bottlenecks that the industry is going to have to fix relatively quickly if we're going to keep up the momentum," he said. "Hopefully, we get past that relatively quickly."
SLB expects to reactivate up to 15 oil rigs that are currently in Venezuela, said William Antonio, SLB's president of Mexico, Central America and Venezuela operations, adding that small workover rigs are expected to be deployed first.
"I'm sure these rigs will be fully busy in less than a year," he said.
Antonio told Reuters that up to four of the rigs are expected to be reactivated this year, depending on the signing of contracts with oil producers. In about two years, Venezuela's crude production will be higher, he said. "Question is how sustainable it will be," considering the need for diluents and infrastructure challenges, he said.
