SLB Gains Access to Venezuela's Oilfield Data in Modernization Deal, Sources Say

Oilfield services company SLB has signed a contract with Venezuela's state-run Petróleos de Venezuela, S.A. (PDVSA) that grants it access to the country's extensive but neglected oilfield data, according to three sources familiar with the negotiations. The agreement marks a significant step toward bringing transparency to the energy sector of the nation holding the world's largest crude reserves.

Scope of the Agreement

The contract's primary objective is to help PDVSA and the oil ministry digitize, consolidate, and modernize the country's entire oil industry database. According to one source, the deal involves technology transfer and training, with SLB expected to deploy new technologies, including artificial intelligence, to restore reliability to Venezuela's oil data, which covers everything from reservoir characterization to real-time production.

This modernization effort could make critical information available to potential investors through a cloud-based system. The lack of reliable data has been a major impediment to attracting investment, as Venezuela has not published routine oil statistics in over a decade, with its last annual bulletin released in 2015.

Addressing a System in Disarray

The need for this overhaul was intensified by a ransomware attack late last year that crippled PDVSA's systems, from email to contract administration software. The cyberattack resulted in what sources describe as "information chaos," with staff resorting to rudimentary communication services and facilities operating without a centralized system.

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While PDVSA has reportedly patched some core applications, significant data was lost due to server damage. "Some data needs to be rebuilt from paper copies," one of the sources stated. The project with SLB is seen as essential for migrating geological and production databases to new providers and implementing modern tracking tools.

Operational and Financial Hurdles

The deal comes with considerable challenges, rooted in the harsh U.S. sanctions imposed on Venezuela's energy sector in 2019. Those sanctions led PDVSA to default on billions of dollars in payments to service firms, including SLB. Details on the new contract's duration and payment structure remain undisclosed.

Sources indicated that payments in kind, such as with crude oil, were discussed during negotiations, as direct financial transfers are complicated by U.S. control over revenue from the country's oil exports. Despite these obstacles, the agreement gives SLB a crucial first external look at Venezuela's closely guarded oil statistics in decades. Last week, Venezuela's oil ministry and the U.S. embassy in Caracas confirmed an agreement had been signed to "modernize exploration and production."