Formentera Partners considers a team to study Venezuelan shale fields, founder says

By Arathy Somasekhar

HOUSTON, Jan 10 (Reuters) - Privately-held U.S. oil and gas company Formentera Partners is looking at hiring a technical team to study Venezuela's shale fields, its founder Bryan Sheffield said in an interview with Reuters on Saturday.

Sheffield, the son of Pioneer Natural Resources founder Scott Sheffield, said his company was interested in the La Luna field in the Zulia state in the western part of the South American country and the Querecual field in the east.

"After speaking with Energy Secretary Chris Wright, I feel like I should hire a team to study the technical side and look at rock and shale fields in Venezuela," said Sheffield, who attended a White House meeting on Friday between oil CEOs and U.S. President Donald Trump and Wright.

"We are motivated and interested, but also obviously cautious," Sheffield said, adding that worries about safety, given reports of the presence of armed militia, need to be assuaged.

"We want to stay ahead of the pack and be ready when the floodgates open," he said.

The U.S. State Department issued an alert telling U.S. citizens still in Venezuela to leave the country immediately, citing reports of groups of armed militias.

Sheffield, who was CEO of publicly-traded Parsley Energy before it was acquired by Pioneer Natural Resources, said he expects the exploration wave in Venezuela to be driven by independent oil companies, echoing U.S. Treasury Secretary Scott Bessent's comments earlier this week that the largest oil companies are likely to move slower in terms of making investments in Venezuela, with wildcatters or independent oil companies likely to move much more quickly.

"The independent companies will take more risk than oil majors, make money and prove the fields," Sheffield said.

The White House meeting on Friday included Bill Armstrong, CEO of Armstrong Oil and Gas which operates in nearby Aruba, Jeff Hildebrand, founder of Hilcorp Energy, Ross Perot Jr, who founded privately-held HKN Energy which has operations in Iraq. The meeting also included U.S. majors Exxon Mobil XOM.N, Chevron CVX.N, as well as European majors Shell SHEL.L, Eni ENI.MI and Repsol REP.MC.

SHALE RESERVES YET TO BE PROVEN

While Venezuela has the world's largest crude oil reserves, its shale fields are yet to be proven.

It would cost between $500 million and $1 billion to get shale production going in Venezuela, Sheffield estimated, adding that he sees similarities between the shale region in the South American country and the Permian Basin, the U.S.'s top shale production area spread across Texas and New Mexico.

Capital from private family offices is likely to back independent producers, Sheffield said, as pension funds and institutional investors tend to be more risk-averse.

The U.S. government seemed unlikely to backstop or protect U.S. companies' investment in Venezuela, he added. Trump said on Friday that he wants the oil industry to invest $100 billion to expand oil production.