Repsol's Chief Executive has outlined plans to significantly increase the company's oil and gas production in Venezuela, following the issuance of new US general licenses. The executive expressed optimism about Venezuela's energy industry, stating the company is preparing to restart and resume its operations directly.

New Licensing and Operational Plans

The US issued two new general licenses that allow several oil majors, including Repsol, to explore and produce oil in Venezuela. These licenses permit new agreements for local investment into oil and gas operations, which are seen as critical for increasing output. Repsol plans to continue and increase its gas supply for the domestic market, targeting a rise to 640 million cubic feet per day from the current 580 MMcfd at the Perla offshore field, operated in a joint venture with Eni.

Restarting Oil Exports and Production Increases

A key objective for Repsol is to restart lifting oil and condensate cargoes to monetize its assets and pay for its gas supply. This opportunity is critical as previous oil export operations were affected when US sanctions revoked licenses allowing PDVSA's partners to take crude under swap arrangements. Repsol produces oil through the Petroquiriquire joint venture with PDVSA and, if allowed, could export Venezuelan heavy sour crude to refineries in the US and Spain. The company plans to increase oil production by restoring normal operations through investment in production facility renewal and potentially introducing a rig. For the Petrocarabobo joint venture, there is seen potential to increase production using existing infrastructure.

Growth Targets and Financial Outlook

Overall, Repsol could expand its combined oil and gas production in Venezuela by more than 50% over the next 12 months. Current output is approximately 45,000 barrels of oil equivalent per day, with a previous ambition to triple oil production in the country within three years. The company is confident that cash flow from normalized commercial activities, expected to resume shortly under the new contractual framework, will finance this expansion effort. This announcement accompanied the company's financial results, which showed a 10% year-on-year increase in adjusted net income for the fourth quarter.