BP gas MoU signals Venezuela offshore ambitions despite infrastructure reality

BP has agreed to develop the Cocuina-Manakin offshore gas field, which sits on the maritime border between Venezuela and Trinidad and Tobago, and signed a memorandum of understanding with the Venezuelan Government that also covers potential collaboration in the Loran offshore gas field. The commercial consequence is immediate for Trinidad's liquefied natural gas exports, as BP's objective is to utilise more than one trillion cubic feet of gas from the field for Trinidad's LNG facilities. But offshore exploration timelines mean any meaningful gas flow is 7-10 years away, while Venezuela's infrastructure gaps make monetisation uncertain even with legal reform.

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The Hydrocarbons Law Amendment opens new pathways for private sector participation, reflecting a recalibration of Venezuela's approach to its oil and gas sector, creating a more favorable environment for foreign investment to support increased production in the Venezuelan oil and associated gas industry. The law a memorandum of understanding (MoU), a preliminary agreement that establishes framework for potential future contracts but creates no binding commitment to invest allows private operators to assume operational control while retaining a share of production, with enhanced minority shareholder rights including direct marketing, banking, and operational management rights. Consider the contrast: under the old framework, foreign companies were minority partners with no operational control; under the reform, they can manage day-to-day operations and market gas directly.

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On the buy side: European LNG importers seeking supply diversification face a 2030-2035 delivery timeline for Venezuelan gas, assuming infrastructure investment proceeds without delays. Current JKM Asian LNG prices at low-USD 17s/MMBtu create an economic incentive for long-term development, with delivered US LNG to Asia costing approximately $8.80/MMBtu.

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On the sell side: Shell has also expressed interest in the Loran project, with BP already operating the field's Trinidadian section through a BP subsidiary. The cross-border structure allows BP to leverage existing infrastructure and regulatory frameworks on the Trinidad side while accessing Venezuelan reserves.

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For large integrated gas developers (BP, Shell, TotalEnergies): the Venezuela entry point requires patient capital upstream exploration followed by infrastructure development spanning a decade. In February, BP announced it was seeking a licence from the US Government to advance development at the Manakin-Cocuina site, with the company's objective to utilise more than one trillion cubic feet of gas from the field for Trinidad's liquefied natural gas exports. For smaller regional LNG players Caribbean utilities, independent gas marketers, regional project developers without deepwater drilling capabilities: partnership with established majors or infrastructure sharing agreements represent the practical equivalent to direct participation.

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Watch Henry Hub prices at $2.72/MMBtu as of April 27 and JKM-Henry Hub spread movements through Q3 2026. The deal arrives during a global energy crunch driven by the Iran war and Hormuz blockade, with Venezuelan gas potentially helping diversify supply for Trinidad's LNG export facilities and reduce Caribbean energy dependence on volatile global markets. Any material shift above $20/MMBtu JKM sustained for six months signals accelerated timeline for Venezuelan offshore commitments.