The Daily Journal.- Oil company GeoPark announced its strategic entry into Venezuela’s oil industry through the acquisition and development of the Bare block, located in the Orinoco Oil Belt, in a transaction that will make the Gilinski Group the company’s controlling shareholder.
According to Bloomberg, the transaction includes a 25-year Production Participation Contract (CPP) with Petróleos de Venezuela S.A. (PDVSA) under Venezuela’s new regulatory framework for the oil industry.
Gilinski Group Chairman Jaime Gilinski said the conglomerate remains confident in the development prospects of the Venezuelan asset.
“We believe in Venezuela’s potential and in GeoPark’s ability to develop Bare responsibly. We are proud to support the Company’s growth in the country,” he said.
GeoPark will finance the transaction through a share issuance that will give the Gilinski Group a majority stake in the company. Once the transaction closes, the Colombian conglomerate will hold approximately 56.3% of the outstanding common shares, with the possibility of increasing its stake to nearly 58.4%.
A block with the capacity to multiply production
The Bare block holds approximately 15.7 billion barrels of original oil in place and has produced more than 700 million barrels throughout its history. The field once produced more than 100,000 barrels per day, although current gross production stands at around 11,000 barrels per day.
GeoPark, however, estimates that the asset could reach peak production of between 85,000 and 95,000 barrels per day. The development plan also projects approximately 400 million barrels of cumulative net production for the company.
According to GeoPark’s projections, gross production at the block could reach between 18,000 and 20,000 barrels per day in 2027 and rise to between 44,000 and 56,000 barrels per day during 2029-2030, depending on international oil price trends.
GeoPark to hold operational control and a 65% economic interest
Under the new contractual structure, GeoPark will operate the block and finance 100% of the capital investments included in approved work programs.
In return, the company will hold a 65% net economic interest. The contract also grants GeoPark rights to “directly market and monetize hydrocarbons,” access critical infrastructure, exercise operational control mechanisms, and invoke economic rebalancing and compensation provisions in the event of operational disruptions.
The agreement still requires regulatory approvals and compliance with applicable sanctions before it can take full effect. GeoPark expects that process to take no more than 120 days.
The company said it has approximately $700 million in liquidity, including about $310 million in cash, as well as committed financing sources and additional funding under negotiation to support the project’s development.
GeoPark CEO Felipe Bayón described Venezuela’s energy revival as one of Latin America’s most significant industrial opportunities.
“The Bare block offers massive scale, existing infrastructure, a track record of production and significant redevelopment potential in one of the world’s largest hydrocarbon basins,” he said.
With information from Bloomberg
