Baker Hughes signed two separate Venezuela agreements on Oct. 5: a strategic alliance with PDVSA, Lindsayca and Fulcrum LNG, Inc. to rebuild the country's natural gas infrastructure, and a memorandum of understanding with New Stratus Energy Inc. covering future oil and gas prospects. Baker Hughes (NASDAQ: BKR) signed the PDVSA alliance in Caracas. The New Stratus MOU was signed separately and, the company said, more recently.

What the PDVSA alliance covers

Under the alliance, Baker Hughes contributes its oil and gas field development, gas infrastructure and LNG technology. Lindsayca, a Houston-based company that has worked in Venezuela as Lindsay C.A. since 1986, brings engineering, procurement and construction capability. Fulcrum LNG adds midstream and LNG project development, financing and market access, using the same open-access infrastructure model it runs on the U.S. Gulf Coast; its project portfolio is concentrated in Latin America and the Atlantic Basin. The three companies said they will focus on project-specific agreements to process, transport, commercialize and export Venezuelan natural gas.

Any individual project under the alliance still needs its own definitive agreement, each company's internal approval, and clearance under U.S. sanctions and export-control rules, including authorization from the Treasury Department's Office of Foreign Assets Control, before work can begin.

Baker Hughes chairman and CEO Lorenzo Simonelli said the alliance is meant to turn Venezuela's natural gas resources into reliable domestic supply, with "the potential to export the first LNG molecules produced in Venezuela." Fulcrum LNG CEO Jesus Bronchalo called the PDVSA tie-up "a historic opportunity to maximize the use and value of Venezuela's natural gas resources." Bronchalo said the near-term focus is working with PDVSA to identify and execute the infrastructure upgrades needed to meet the country's internal gas needs and supply the domestic power sector; over the medium and long term, he said, the partners will evaluate financing new open-access midstream and LNG infrastructure for PDVSA and other upstream operators.

A separate bet on New Stratus

Through the MOU, Baker Hughes will apply its subsurface, drilling, production, processing, digital, emissions-abatement, power-generation and LNG technology to New Stratus Energy's future oil and gas prospects, aiming to speed up project development and raise how much resource gets recovered.

Baker Hughes' track record in Venezuela

Baker Hughes has worked in Venezuela's energy sector for more than 60 years. Its installed base there includes more than 1,200 oil production systems, the largest artificial lift footprint, a significant flexible-pipe network, and roughly 240 turbomachinery units across 23 sites.

We reported this month that Baker Hughes signed a deal to evaluate 120 wells at OGDCL's Pakistan fields.