Italy's Eni Takes Junin 5 Control to Recover $2.3B Debt

Italian energy company Eni has assumed operations at Venezuela's Junin 5 heavy oil project under a new 25-year production-sharing agreement, positioning the firm to claw back more than $2.3 billion in long-standing receivables from state-owned PDVSA as Washington reshapes the country's energy sector.

"We will begin drilling the first well tomorrow," said Eni Chief Executive Claudio Descalzi on Wednesday following a Caracas signing ceremony.

Expanding Footprint in the Orinoco Belt

The agreement shifts Eni into the role of field operator for the giant Junin 5 development located in the Orinoco Oil Belt. Under the newly restructured accord, Eni and PDVSA intend to inject approximately $1.5 billion annually into the project.

Current output at Junin 5 stands at about 12,000 barrels per day. The operating partners have set a production target of 400,000 barrels per day by 2030, scaling extraction significantly from current levels.

"The deal will provide further opportunities for value creation for the country and for the gradual recovery of outstanding receivables," said an Eni spokeswoman.

Historical Debt and Financial Exposure

The pivot toward operational control addresses decades of accumulated financial exposure in the South American nation. Venezuela's state debt to Eni has accumulated over nearly three decades of operating in the country.

Beyond the primary $2.3 billion in direct debt owed to Eni, the Italian firm shares exposure alongside Spanish energy company Repsol. An additional $400 million remains owed to a natural gas joint venture operating the offshore Perla field, which is equally owned by Eni and Repsol.

Geopolitical Shifts and Revenue Claims

These commercial developments unfold against a backdrop of shifting U.S. intervention and sanctions policy in Venezuela. U.S. Energy Secretary Chris Wright recently stated that China would hold no claim on revenue generated from Venezuelan fields partially controlled by Washington.

This policy stance threatens to dismantle established mechanisms Caracas has previously utilized to service and repay multi-billion-dollar loans extended by Beijing. By formalizing long-term operating control under revised terms, Eni seeks to secure direct cash flows to amortize its historical balance sheet claims before external creditors step in.