BP Secures Venezuelan Gas Drilling License Weeks After Exiting North Sea

BP has obtained a drilling license in Venezuela, marking a significant shift in its exploration strategy just two weeks after divesting its North Sea operations. The oil giant has signed an agreement with Venezuela to explore and develop the Loran gas field in the Atlantic Ocean, which holds an estimated four trillion cubic feet of gas.

This development follows BP's decision to put its North Sea business up for sale after 60 years, a move attributed by some to the impact of the windfall tax on oil and gas producers. BP's chief executive, Meg O’Neill, has previously stated that the North Sea is no longer competitive and has urged for the abolition of the windfall tax.

Conservative shadow energy minister Andrew Bowie commented that BP's expansion into areas like Venezuela is unsurprising, given what he described as a government sentiment that is "completely anti their core business." He characterized the North Sea basin as one of the most fiscally insecure globally, deterring investors due to unpredictable taxation policies and a lack of a welcoming environment in the United Kingdom.

The deal, which was signed in Caracas and broadcast on state television, coincides with an increase in international oil companies expanding their presence in Venezuela. This follows the arrest of former president Nicolas Maduro by U.S. forces in January.

BP will undertake the second phase of the Loran gas field development in partnership with the United Arab Emirates firm XRG and the Qatari conglomerate UCC Holding. O’Neill, who signed the agreement, highlighted the importance of the Loran Phase 2 license award, noting it builds upon established collaboration with Venezuela and its partners. She emphasized BP's long-standing regional presence and expertise in developing major gas resources, stating that the agreements provide a strong foundation for advancing Venezuela's offshore gas potential.

Richard Tice, Reform UK's energy spokesman, expressed dismay that BP is pursuing drilling deals with "authoritarian dictatorships" instead of the North Sea, calling it a "tragedy" and a reflection of what he termed the "absurdity" of opposition to opening up the North Sea.