(LNG Energy Group, 24.Apr.2024) — LNG Energy Group Corp. (TSXV: LNGE) (TSXV: LNGE.WT) (OTCQB: LNGNF) (FRA: E26) announced that its wholly-owned subsidiary, LNGEG Growth I Corp. (LNG Venezuela), entered into a binding agreement with PDVSA Petroleo S.A. (PPSA), a subsidiary of Petroleos de Venezuela S.A. (PDVSA), the Venezuelan national oil company, for the operation of the Nipa-Nardo-Niebla and the Budare-Elotes CPPs in onshore Venezuela (collectively, the “Venezuela Blocks”).
Highlights:
- LNG Energy Group has been conditionally awarded two Productive Participation Contracts (“CPPs”) to develop and produce hydrocarbons in Venezuela.
- The contracts cover five onshore fields that are currently producing approximately 3,000 bbl/d of oil.
- The Blocks have existing production and transportation infrastructure in place.
Venezuela – Country Dynamics at a Glance
The country is widely recognized as the location of some of the best oil and gas assets globally. According to the BP 2023 Statistical Review, Venezuela has oil reserves of more than 300 billion bbl, the largest in-country oil reserves in the world, and by a wide margin the longest reserve life. BP also estimates Venezuela has natural gas reserves of more than 200 trillion cubic feet, ranking number nine in the world.
Venezuela Blocks
The Venezuela Blocks are located onshore in the Anzoátegui and Monagas States and are producing approximately 3,000 bbl/d of light and medium oil. LNG Venezuela will work jointly with PPSA to develop a work program based on technical due diligence and field visits.
Contract Terms
The agreement with PPSA was entered into on 17 Apr. 2024. LNG Venezuela will provide the required investment to further develop the fields and conduct operations and has 120 business days from the date of signing to satisfy the required contractual conditions precedent in order to be awarded the CPPs and initiate operations. Pursuant to the CPPs, LNG Venezuela will have a contractual entitlement to between 50-56% of the hydrocarbons production from the Venezuela Blocks.
Additional Considerations
The CPPs were executed within the term of General License 44 issued by the US Office of Foreign Assets Control (OFAC). License 44 has been replaced by License 44A requiring US persons to wind down oil operations in Venezuela before 31 May 2024. The company will assess in the coming days the applicability of License 44A to its intended operations in Venezuela and determine the most appropriate course of action. The company intends to operate in full compliance with the applicable sanctions regimes.
About LNG Energy Group
The company is focused on the acquisition and development of natural gas production and exploration assets in Latin America. For more information, visit www.lngenergygroup.com.
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