U.S. oilfield services firm Baker Hughes said it sees a significant revenue opportunity in Venezuela as sanctions constraints ease and payment mechanisms improve, opening the door for expanded activity in the country’s oil sector, according to comments reported by Reuters on Monday.
Baker Hughes said engagement with Venezuela has increased as operators prepare for a recovery in drilling, production maintenance, and infrastructure work after years of underinvestment. The company pointed to demand for artificial lift systems, compressors, well services, and digital monitoring tools as Venezuela works to stabilize output from mature oilfields.
“We’re taking a prudent long-term view as we continue to evaluate opportunities and also the activity we have in the market,” Baker Hughes CEO Lorenzo Simonelli said during an earnings call. Simonelli noted that moderate production increases in Venezuela will require substantial investment in well integrity, off-grid power generation, equipment replacement, upgrades and services, adding: “The incremental opportunity of revenue is significant, and will be obviously programmatic as we go back, and there’s a lot of work in progress.”
The comments come after the U.S. government issued licenses allowing limited oil-related work in Venezuela. Under those licenses, oilfield service companies are permitted to supply equipment and provide technical services connected to oil production and exports, and to receive payment for that work through approved channels. The measures do not lift U.S. sanctions, but they do allow specific projects to move forward under defined conditions.
Other oilfield services companies have signaled similar interest. Halliburton has previously said it is positioning for a return to Venezuela, citing extensive deferred maintenance across producing fields and surface facilities. Halliburton executives have said years of reduced service activity have left wells in need of workovers, pressure management, and equipment replacement before output can rise meaningfully.
Venezuela’s crude production has edged higher over the past year, driven largely by improved operations at joint ventures involving foreign partners, but it remains far below levels seen prior to U.S. sanctions. State producer PDVSA continues to face operational bottlenecks, including aging infrastructure, power reliability issues, and shortages of spare parts, all of which increase reliance on external service providers.
By Charles Kennedy for Oilprice.com
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