Continental Resources Signs Memorandum with PDVSA for Development of the Ayacucho 2 Oil Block

en.Wedoany.com Reported - On September 16, U.S. oil and gas producer Continental Resources signed a memorandum of understanding with Petróleos de Venezuela, S.A. (PDVSA) to operate and develop the Ayacucho 2 block in Venezuela's Orinoco Oil Belt. The two parties plan to continue advancing toward a long-term Production Participation Contract (Contrato de Participación Productiva, CPP) in the coming weeks; once the CPP is formally signed, Continental Resources plans to serve as the block operator and hold a 100% working interest.

Ayacucho 2 is located in Anzoátegui State, Venezuela, north of the Orinoco River, covering approximately 126,000 acres, or about 510 square kilometers. Continental Resources estimates that the block holds approximately 30 billion barrels of original oil in place. The project is currently a greenfield development, and early-stage work will focus on large-scale seismic exploration, reservoir evaluation, and further exploration to determine subsequent drilling and development plans.

Doug Lawler, Chief Executive Officer of Continental Resources, said the company is evaluating the possibility of bringing in project partners for Ayacucho 2, but at this stage still plans to retain a 100% working interest. According to the company's current schedule, the block could achieve first oil in approximately 18 months at the earliest. The key near-term milestone for the project is completing the long-term CPP contract, moving from the current memorandum of understanding stage into formal production and development arrangements.

According to Continental Resources' announcement, the company conducted an independent assessment of Venezuelan oil and gas opportunities before deciding to enter the project, and listed Venezuela's revised oil and gas legal framework as one of the conditions for advancing the development of Ayacucho 2. The scope of this agreement includes block operation and development, and Continental Resources plans to invest capital, oil and gas development technology, and large-scale operational capabilities into the project.

The Orinoco Oil Belt, where Ayacucho 2 is located, is Venezuela's main heavy oil resource area. Recently, Venezuelan oil and gas projects have increasingly adopted structures such as joint ventures and production participation contracts to advance development, and new entrants have also begun negotiating operating rights and development arrangements with PDVSA under the new contractual framework. Continental Resources' Ayacucho 2 project has not yet disclosed the total investment amount, the number of first-phase development wells, the target daily production, or the scale of surface processing facilities.

From the perspective of project implementation sequence, the current business chain has been clearly defined as "signing the MOU—completing the CPP contract—seismic exploration and exploration evaluation—determining the development plan—drilling and facility construction—first oil production." The earliest first production time given by Continental Resources is 18 months, and the subsequent CPP contract will further determine the project's investment responsibilities, operating arrangements, and specific development conditions.