Billionaire Harold Hamm Makes Deal to Explore for Venezuela Oil

(Bloomberg) -- Billionaire shale pioneer Harold Hamm's Continental Resources Inc. reached a deal for an oil field in Venezuela as the Trump administration pushes US companies to revive the nation's oil sector.

The Oklahoma City-based company will operate and develop the Ayacucho 2 Block in Venezuela's prolific Orinoco Belt, according to a statement Wednesday. It covers about 126,000 acres and holds an estimated 30 billion barrels, the company said.

Continental signed a memorandum of understanding with Venezuela's state oil company and plans to have a long-term agreement in place within weeks.

The agreement by Hamm, a significant donor to US President Donald Trump, adds to a slate of deals in recent weeks aimed at boosting Venezuela's crude production. Bloomberg reported earlier Wednesday that Continental was poised to announce the deal.

Chevron Corp., GE Vernova Inc. and Eni SpA all recently announced agreements alongside Wright and acting Venezuelan President Delcy Rodríguez at a signing ceremony in Caracas. Other companies that signed deals include Geopark Limited and privately held Aspect Holdings.

Wright said the deals represent "tens of billions" worth of investments that marked a "transformation for Venezuela." But some analysts have questioned their durability in the face of lingering concerns about contract sanctity in a nation with a history of nationalization.

Hamm, one of Trump's most outspoken supporters in the oil industry, was among the first to use horizontal drilling to unleash crude from shale rocks, helping spark a surge in output that has made the US the largest producer in the world.

Restoring daily Venezuelan oil output to the 3 million-barrel-a-day mark not seen in roughly 15 years will require major injections of foreign cash, and it's not yet clear if overseas drillers can make a go of it in the South American nation, Dan Pickering, chief investment officer at Pickering Energy Partners, said at conference in Houston earlier this week.

The US government negotiated for a 35% stake in Venezuelan entrepreneur Alejandro Betancourt's North American Blue Energy Partners, a privately held company granted 100-year deals in 17 Venezuelan oil fields. Betancourt is a contentious figure in Venezuela, but the Trump administration has defended its decision to partner with the investor.