Harold Hamm's Continental Resources has signed a memorandum of understanding with Venezuela's state oil company to develop a 126,000-acre stretch of the Orinoco Belt estimated to hold 30 billion barrels of reserves. The Oklahoma City-based producer says it hopes to turn that preliminary agreement into a long-term production-sharing deal with Petróleos de Venezuela in the coming weeks.
The announcement landed at a meeting of energy ministers from the Group of 20 nations hosted by the Trump administration in Houston, according to The New York Times. Continental, which is led by Hamm, is described by CNBC as one of the largest privately held oil and natural gas producers in the world, and the memorandum covers a 126,000-acre area with an estimated 30 billion barrels of reserves.
Hamm made his fortune drilling domestically and was a major figure in the shale-fracking boom that reshaped American energy production, the Times notes. As reported by Bloomberg, Continental was set to announce the Venezuela deal, and Hamm is widely known as a billionaire shale pioneer with deep ties to the current administration.
A Widening Rush Into Venezuelan Crude
Dealmaking in Venezuela's oil patch has accelerated in recent weeks, per the same CNBC report, as the Trump administration pushes American companies to play a bigger role in the country's energy industry. The Wall Street Journal reports that Continental says it hopes to sign a full production-sharing deal with Venezuela in the coming weeks, following the memorandum signed with the state oil company.
Continental isn't the only major driller circling the country. Chevron, the only U.S. oil major currently authorized to operate in Venezuela under an exemption from sanctions, announced on September 2 that its Venezuelan joint ventures plan to invest more than $7 billion over the next five years, more than doubling production to roughly 600,000 barrels a day, according to a Chevron announcement. That deal gave a Chevron subsidiary a 49% interest in the Petroindependencia joint venture and rights to develop the adjacent Carabobo-1 and Carabobo-2-South-A areas of the Orinoco Belt.
Other Names Circling the Same Opportunity
Washington has also been pushing Valero Energy, Exxon Mobil and ConocoPhillips to get involved in Venezuelan oil exports, according to Reuters, which also reported that the U.S. and Venezuela have discussed supplying up to 50 million barrels of Venezuelan oil to American buyers. The Times reported in late August that Exxon Mobil and ConocoPhillips have pursued their own opportunities in the country, though much of that activity has so far been preliminary or relatively small.
Halliburton is also in talks tied to Venezuelan oil fields, the Journal has reported separately. Continental itself is no stranger to overseas expansion: the company has struck deals to produce oil in Turkey and Argentina in recent years, the Times notes, making the Venezuela push part of a broader pattern of international growth for the Oklahoma driller.
What Comes Next for Continental
For now, Continental's Venezuela plans remain at the memorandum stage, with the company aiming to finalize a binding, long-term agreement with Petróleos de Venezuela in the near term. The reported development area covers 126,000 acres and has estimated reserves of 30 billion barrels amid the current wave of U.S. interest in Venezuela's oil sector.
