Mounir Bouaziz, who left Shell last year and is now an independent business developer, said he began talks last October with Venezuelan state oil company PDVSA and the oil ministry, but he acknowledged U.S. sanctions on PDVSA – designed to oust socialist President Nicolas Maduro – were an obstacle.
Bouaziz oversaw Shell’s efforts to reduce flaring in southern Iraq after years of war left infrastructure in poor shape. Venezuela is in a sixth year of economic crisis, leaving PDVSA without resources to maintain gas facilities.
“It’s the same story here in Venezuela,” Bouaziz said in a Feb. 28 interview in Caracas. “It’s much easier to have that experience than trying to reinvent the wheel.”
Bouaziz hopes to raise private investment to repair damaged processing plants to capture and use the gas, extracted alongside crude oil that Venezuela currently burns.
This kind of flaring takes place at oilfields around the world without the infrastructure to process gas. Flaring releases 300 million tonnes of climate-warming carbon dioxide a year, according to the World Bank. That represents nearly 6% of greenhouse gas emissions from oil and gas operations, according to the International Energy Agency.
Venezuela flared or otherwise lost 3.4 billion cubic feet per day (bcfd) of natural gas in 2019, up from 2 bcfd in 2010, according to consultancy Gas Energy Latin America. That came even as oil output fell 56% in that period to 1 million barrels per day (bpd) in 2019.
The problem is severe in eastern Monagas state, where the Furrial and Punta de Mata light oil fields have a lot of associated natural gas.
“There are too few plants, and those that are there do not work,” said Igor Miranda, who leads the Monagas chapter of the Oil Chamber of services companies.
Bouaziz plans to start by fixing compressors needing a few parts, which would cost tens of millions of dollars. He is in talks with potential investors but declined to name them.
PDVSA cannot finance such a project itself due to tumbling cash flow after years of mismanagement, corruption and falling oil prices. Sanctions also block it from major lenders.
Bouaziz said the project would make money by selling recovered gas to PDVSA’s joint ventures with private oil companies, which can re-inject it, or domestic industrial consumers.
