Repsol sees 11% growth in gas output at Venezuela JV, progress on oil operations

By Pietro Lombardi

MADRID, Oct 29 (Reuters) - Spanish energy group Repsol REP.MC expects to increase daily gas production at its Venezuelan joint venture by some 11% by the first quarter of 2028 and is making "solid progress" toward raising oil output there, its chief executive said on Thursday.

Repsol has operated in the South American country for decades despite political upheaval, economic collapse and US sanctions, accruing billions of dollars in unpaid bills by the Venezuelan state along the way.

That persistence is now starting to bear fruit, with the company gearing up to increase oil and gas output in Venezuela using the proceeds it generates there.

The flagged gas output would take daily production at its Cardon IV joint venture to around 645 million cubic feet per day from the current level of 580 million cubic feet, slightly above Repsol's previous forecast of an increase of about 10%.

Repsol and Italy's Eni ENI.MI each own half of the gas joint venture.

"Every cubic feet of gas we produce is paid through the cargoes program we have had over this year, including an additional cargo to finance the investment in Cardon," Repsol CEO Josu Jon Imaz told analysts after third-quarter results.

So far this year, Repsol has received three crude oil cargoes from Venezuela as payment for the gas produced there, Imaz said, and two more were expected this year.

OIL OPERATIONS

Venezuelan state energy firm PDVSA is meeting in full its commitments not only on gas payments but also on Petroquiriquire, its oil joint venture with Repsol, so that investments to increase oil output there are fully paid for by proceeds from the country, he said.

"We have made solid progress since assuming operatorship in April, including the award of a significant proportion of the contracts required to increase light crude oil production," Imaz said.

Imaz also said Repsol was "in the last steps of the negotiation" of a contract in Petrocarabobo, another oil project in the country, which should be finalised by the end of the year.

Looking at the potential oil output, "we are talking about a plateau at the end of the road that could be at around 210,000 barrels a day, gross production, where Repsol is going to have a stake of around a third," he said.