Trump Ally Harold Hamm Strikes Venezuela Oil Deal

Harold Hamm, an oil executive who is close to President Trump, on Wednesday announced plans to drill for oil in Venezuela, joining a growing number of American oil producers planning to do business in the South American country.

Mr. Hamm’s company, Continental Resources, signed a preliminary deal with Venezuela’s national oil company, Petróleos de Venezuela, to develop and operate a 126,000-acre region in the country’s oil-rich Orinoco Belt, known as the Ayacucho 2 Block.

The agreement, which is not part of the deal that the Trump administration announced last month, was revealed at a meeting of energy ministers from the Group of 20 nations in Houston. It comes after Chevron, a much bigger U.S. oil company that is already operating in Venezuela, said it would more than double its production in the country over the next five years.

Mr. Hamm, whose company is based in Oklahoma City, made his fortune drilling domestically. He has been a major player in the shale fracking boom that made the United States the world’s biggest oil and gas producer.

But many oil executives who made their fortunes in the United States are now looking abroad as they become more concerned about running out of attractive drilling opportunities at home. Continental in recent years struck deals to produce oil in Turkey and Argentina.

If Mr. Hamm’s preliminary deal moves ahead, it would be Continental’s first foray into Venezuela. The country has a lot of oil but its industry has been eroded by years of mismanagement, underinvestment, corruption and U.S. sanctions. Much of Venezuela’s oil is so heavy that it has the consistency of asphalt. Few American oil producers have much experience handling such heavy oil.

“This is a huge resource in Venezuela,” Mr. Hamm said on Wednesday at the G-20 meeting. “We know this is a great opportunity.”

Continental has not said how much it planned to invest or how much oil it aimed to produce in Venezuela.

Some energy experts have been doubtful that producers will be able to easily or quickly unlock Venezuela’s vast oil reserves. But Mr. Hamm pointed out that Continental had helped to pioneer the use of fracking techniques to extract oil from shale rock, something many industry experts had also been skeptical of.

“Our team is used to challenges,” Mr. Hamm said. “We like that. We rise to the occasion and perhaps do the impossible sometimes.”

Mr. Hamm has been a trusted adviser on energy issues to Mr. Trump and contributed to the president’s political campaigns.

Mr. Trump’s energy secretary, Chris Wright, and interior secretary, Doug Burgum, attended the event announcing Continental’s Venezuela deal on Wednesday, as did several senior Venezuelan officials.

“It’s a milestone deal in making the Western Hemisphere the center of the global energy system,” Mr. Wright said.