This article first appeared on GuruFocus.
Eni (NYSE:E) is positioning for a potential step-change in Venezuela just as policy constraints begin to loosen. The company has agreed to restart the Junin-5 heavy oil project in the Orinoco Belt in partnership with state-owned Petroleos de Venezuela SA, following a meeting in Caracas between Chief Executive Claudio Descalzi and interim President Delcy Rodriguez. The project, which is structured with PDVSA holding 60% and Eni 40%, is estimated to contain about 35 billion barrels of oil in place and had remained inactive for years due to sanctions and unresolved payment issues. The restart follows a major energy conference in Caracas that attracted one of the largest gatherings of international energy companies and investors in recent years, which could signal a gradual reopening of Venezuela’s upstream sector to foreign capital.
The broader backdrop could be turning more constructive. Recent US licenses now allow companies to engage in limited oil and gas activity in Venezuela, including mechanisms to recover outstanding receivables from PDVSA. This shift could be particularly relevant for Eni, which has previously stated it is owed about $3 billion, and had faced a payment impasse lasting roughly a year. The ability to recoup debt through energy flows could help stabilize cash conversion while also supporting the restart of stalled projects like Junin-5. At the same time, the policy adjustment appears to be part of a wider effort to reintroduce international operators into Venezuela’s energy system, which could gradually rebuild production capacity if conditions remain stable.
Operationally, Eni already maintains a meaningful footprint in the country. The company’s production in Venezuela averaged about 64,000 barrels of oil equivalent per day in 2025, largely tied to the Cardon IV gas project, which includes the Perla field and accounts for roughly 35% of the country’s gas consumption. Eni has also recently signed an agreement to sustain and potentially increase output at Cardon IV, while working with Spain’s Repsol on plans that could include gas exports from the field, described as the largest offshore gas discovery in Latin America. Taken together, the Junin-5 restart, combined with offshore gas expansion, could position Eni to scale its exposure to Venezuela’s resource base, although the pace of progress will likely depend on how consistently the current sanctions framework holds.
