Continental Resources, PDVSA sign MOU to develop Orinoco heavy crude block

Continental Resources has signed a memorandum of understanding with Venezuela's state oil company PDVSA to operate and develop a block in Venezuela's Orinoco Belt, the company announced Sept. 16, one of the first entries by a US independent oil producer into the country's heavy crude sector.

The Oklahoma City-based producer agreed with PDVSA to develop the Ayacucho 2 Block in Anzoátegui state, a 126,000-acre concession it said contained an estimated 30 billion barrels of in-place resources. The parties intend to advance a long-term Contrato de Participación Productiva (CPP) production agreement in the coming weeks under which Continental would operate the block with a 100% working interest.

The deal was signed at the G20 Energy Summit in Houston, where CEO Doug Lawler told reporters that key details of the greenfield development were still being "worked out" but that he expected first oil "in the next 18 months." Lawler did not indicate any expected production volumes.

"Our focus first is to sign a long-term CPP deal and then work out further details," Lawler said. "It's difficult at this time without the seismic data to determine what that development program will look like in terms of wells and infrastructure."

Continental will need to drill a number of exploration and appraisal wells before determining field productivity, Lawler said, noting: "We do believe there is significant potential to mobilize a significant amount of production."

Continental will evaluate opportunities for potential partners to bring the heavy crude from the development to market, Lawler said.

"We have a 60-year history of innovation in technology and we have been involved with different (enhanced oil recovery) projects on a limited scale in the US," he said. "We don't see it as a challenge ... There is infrastructure in Venezuela, and PDVSA has built out a significant network. But this block is located in the southern portion of the Orinoco heavy oil field, and so there will be different infrastructure costs there, either with access to existing infrastructure or building new facilities."

Venezuela 'opportunity'

In its announcement, Continental said the decision "followed the Trump administration's call for US energy companies to help rebuild Venezuela's oil industry."

Since the Jan. 3 arrest of former Venezuelan President Nicolás Maduro, the administration has regularly pushed US companies to invest in the South American country's oil sector. On Aug. 28, it announced a deal between the US Departments of State and Defense and North American Blue Energy Partners to expand the latter's operations in Lake Maracaibo and Orinoco. US Energy Secretary Chris Wright argued the US government's involvement would 'move the needle in the right direction' to encourage further investment, particularly among producers that had assets expropriated when former president Hugo Chavez forced companies to accept majority state control in 2007.

On Sept. 2, Chevron said it plans to spend $7 billion to double its crude production in the country to nearly 600,000 b/d by 2031, unveiling updates to existing joint ventures it said would boost future investments.

"The President wanted us to convert conflict zones into commerce zones," Wright said at the G20 Summit Sept. 16. "Today is a milestone deal in the US-Venezuela relationship."

Venezuelan crude production rose to 1.213 million b/d in August, according to data from the Ministry of Hydrocarbons reviewed by Platts, part of S&P Global Energy, up from below 1 million b/d in December 2025.

"Through this MOU, Continental has the opportunity to bring significant private capital, technology, technical expertise and large-scale operating capability to the redevelopment of Venezuela's oil industry," the company said in its release.

Continental said it undertook an independent evaluation of opportunities in Venezuela and that the country's revised hydrocarbon legal framework provided a viable path for it to proceed. It said Ayacucho 2 represents "one of the most significant resource opportunities in Continental's nearly 60-year history" and would substantially expand its long-term development inventory.

The Ayacucho 2 Block sits north of the Orinoco River in Venezuela's Anzoátegui state, within the Orinoco belt, one of the world's largest accumulations of extra-heavy crude.

Continental is a leading producer in the Bakken formation of North Dakota, South Dakota and Montana, holds positions in the Anadarko Basin of Oklahoma, Wyoming's Powder River Basin, and the Permian Basin of Texas. It has been building an international portfolio that includes Argentina's Vaca Muerta shale formation and a joint platform to develop unconventional resources in Turkey's Diyarbakir Basin.