Continental strikes Venezuela oil block deal

Continental Resources has entered into a preliminary memorandum with Venezuela’s state oil company, Petróleos de Venezuela (PDVSA), to develop and operate the Ayacucho 2 Block in the country’s Orinoco Belt. The arrangement marks a significant move by the U.S. oil producer into Venezuela’s heavy oil region and aligns it with a growing group of American companies pursuing projects there.

The agreement, described as a preliminary deal, outlines plans for Continental and PDVSA to collaborate on Ayacucho 2 but stops short of a final development contract. It establishes the framework for advancing negotiations on detailed commercial terms and operational responsibilities in the near term.

Ayacucho 2 covers roughly 126,000 acres within the oil-rich Orinoco Belt, one of Venezuela’s key heavy crude regions. Reports on the block indicate it holds about 30 billion barrels of oil in place, underscoring its potential scale within Continental’s portfolio.

Company executives have framed Ayacucho 2 as a major resource opportunity. CEO Doug Lawler has characterized the project as among the most significant in Continental’s history, while founder and chairman Harold Hamm has said it takes the company to an entirely new level in terms of resource base.

Following the memorandum, Continental and PDVSA intend to progress to a long-term production-participation agreement, known locally as a Contrato de Participación Productiva. This contract structure is expected to govern the detailed development, production sharing, and operational framework for the block.

Reporting indicates that once such a contract is finalized, Continental would operate Ayacucho 2 with a 100% working interest. This would give the company full operational control of the block under the agreed contractual terms, with PDVSA participating on the host-country side.

The preliminary deal was revealed at a meeting of energy ministers from Group of 20 nations hosted in Houston. The timing and venue placed the announcement within a broader discussion of global energy cooperation and investment flows.

The Ayacucho 2 arrangement has been described as separate from a wider set of 25-year Venezuela initiatives announced by the U.S. administration. This distinction positions the Continental-PDVSA memorandum as a standalone commercial engagement within the evolving framework of U.S.–Venezuela energy ties.

The Continental agreement comes as other U.S. oil companies are also active in Venezuela. Chevron (CVX), which already operates in the country, has recently outlined plans to more than double its production there over the next five years, highlighting renewed interest in Venezuelan oil resources.

Against this backdrop, Continental’s move into Ayacucho 2 adds another large-scale project to the roster of U.S.-linked developments in the Orinoco Belt. The combination of substantial oil in place and a planned 100% working interest shapes the company’s strategic position in the region as talks advance toward a definitive contract.