Venezuela Taps Obscure US Drillers

With brand-name drillers unwilling to jump in, Venezuela is resorting to a newly formed US company for help in shoring up production from its crude reserves, the largest in the world.
Schlumberger Ltd. and Halliburton Co., the world’s biggest oil-service providers, have announced over $2 billion in combined write-offs for unpaid bills in Venezuela since the second quarter of 2017, Bloomberg reported.
That is left the South American country little choice but to reach out to secondary service companies with its oil exports slumping to a 28-year low.
The result: An agreement with US-based Erepla Services LLC, created in 2018, to boost production at the Tia Juana and Rosa Mediano and Ayacucho five fields in exchange for half the oil produced, according to documents seen by Bloomberg. 
Erepla will supply rigs and crews in the onshore fields for 25 years, with an option to extend for another 15 years, according to the contract.
"The agreement gives US-based Erepla enhanced managerial participation and an innovative payment structure designed to avoid the shortfalls that have plagued previous projects," Harry Sargeant III, a principal in Erepla, said in a statement Sunday.
All of the oil produced will initially be bought by Erepla Trading from Petroleos de Venezuela SA, the state energy company. PDVSA will get 50.1% from any subsequent resale while Erepla will get 49.9%. The agreement gives PDVSA oversight but not operational control.
"We believe that the new model created in this agreement is in the national interest of the United States and the interest of the Venezuelan people," Sargeant said in his statement. 
The company’s work "will be carried out in accordance with the economic sanctions enforced by the US Treasury Department, as well as other applicable US and Venezuelan” laws, he said.