BP strikes deal to produce gas in Venezuela just weeks after oil giant announced North Sea sell-off

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The company has been awarded a licence for the Loran field off the country’s east coast

Oil giant BP has struck a deal to produce gas in Venezuela, just weeks after announcing it was seeking to sell up in the North Sea.

The company has been awarded a licence for the Loran field off the country’s east coast, estimated to contain four trillion cubic feet of recoverable gas.

The move will be among the first major foreign investments in the country since former leader Nicolas Maduro was arrested by American special forces in an audacious raid in January.

Venezuela had long been considered a "rogue" state by Washington.

A United Nations fact-finding mission in 2025 concluded its government continued “to engage in actions constituting the crime against humanity of persecution on political grounds”.

Although it has the largest estimated oil reserves in the world, a lack of investment, along with claims of corruption, meant much remained in the ground.

But, following Maduro’s arrest in Caracas, President Donald Trump predicted the oil major would “spend billions of dollars, fix the badly broken infrastructure and start making money for the country”.

He is due to stand trial next year and denies the allegations of weapons and drugs offences.

BP’s Venezuela move is part of a shift towards the Americas.

It comes less than a month after it said it was looking to sell its North Sea assets, following more than 60 years of production.

BP chief executive Meg O’Neill explained the decision to sell at the time, saying: “When we look at how it fits into our portfolio today, it just doesn’t compete for capital.”

She went on: “From an investment perspective, dollars spent in the North Sea are just not as competitive as other opportunities.”

She was more optimistic about Venezuela, explaining how the new licence "builds on the strong collaboration we have established with the government of Venezuela and our partners and reflects the progress we have made together”.

She said: “BP has a long-standing presence in the region and deep experience developing major gas resources.

"Together, these agreements provide a strong foundation to progress Venezuela’s offshore gas potential and unlock the next phase of development.”

BP has also signed a memorandum of understanding for potential exploration and production in Mariscal Sucre, a second offshore area.

Ms O’Neill finalised the agreements on an official visit to Venezuela.

Reacting to the news, Richard Tice, Deputy Leader of Reform, told the Telegraph: “What a tragedy that BP is having to do drilling deals with authoritarian dictatorships instead of in the North Sea.

“This highlights the absolute absurdity of Labour’s refusal to open up the North Sea.”

Industry leaders had warned a harsh set of North Sea policies, including a windfall tax that sees operators pay a total of 78 per cent of profits, was scaring off UK offshore investors.

Sir Jim Ratcliffe, founder of chemicals giant INEOS, said last month, even if the UK's windfall tax were lifted, investors might be slow to act.

The co-owner of Manchester United said: “Unfortunately, the UK has eroded confidence for investment in the North Sea.

Under Prime Minister Andy Burnham, Labour has pledged a “pragmatic” approach to the North Sea.

Energy Secretary Miatta Fahnbulleh visited Aberdeen, the nerve centre of the UK’s offshore energy sector, shortly after her promotion to the Cabinet last month.