(Bloomberg) -- Venezuela is in advanced talks on new deals with European energy majors Repsol SA and Eni SpA as the Andean nation seeks to reassert itself as a global oil producer after the US eased sanctions.

The Spanish and Italian companies are hammering out contract terms between their oil ventures and state-owned Petróleos de Venezuela SA, according to three people familiar with the deals who aren’t authorized to speak publicly. Two of them say an agreement could be reached by the end of the year.

In return, the European majors are hoping to secure exports from a key project that has rights to the largest offshore gas field in South America. They’re also seeking more operational and finance controls from their ventures, hoping to catch up with Chevron Corp. after the US driller was granted a special license to resume production in Venezuela late last year.

Last month, Etablissements Maurel & Prom SA of France became the first European company to sign a contract with PDVSA after the Biden administration suspended sanctions in exchange for electoral guarantees from the Venezuelan government ahead of next year’s presidential vote. 

With markets thirsty to add more barrels from the country with the largest oil reserves in the world, Venezuela is expected to both expand its output and steer more of its existing production to refineries in the US. That could help contain gasoline prices stateside as President Joe Biden campaigns for reelection in 2024.

Nicolás Maduro’s regime, however, has done the bare minimum to keep up its side of the bargain with the US. It hasn’t yet released political prisoners, prompting Biden officials to assess the potential need to reimpose sanctions. Maduro is also ratcheting up tensions with neighboring Guyana, signaling his intent to grant exploration licenses in the disputed oil-rich Essequibo region after holding a referendum on annexation.

Repsol sent a negotiating team to Caracas in November for talks on the contracts and to explore new options to secure access to heavy crude for its oil refineries in Spain, two of the people said. Negotiations will likely hinge on compromises that boost production for both Repsol and PDVSA.  

The Madrid-based company also reviewed long term debt owed by PDVSA for oil and gas sales. This includes debt accrued by PDVSA on natural gas sales from the offshore Cardon IV venture that Repsol runs in equal partnership with Rome-based Eni. The project satisfies nearly a third of Venezuela’s natural gas demand, according to Ruben Perez, director at Chemstrategy, an energy consultancy in Caracas. 

Eni runs five oil ventures in Venezuela, while Repsol operates four. PDVSA has more than 40 oil partnerships with foreign and local companies, some of whom have suspended activity due to the difficult business climate. 

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