Venezuela prepares new licensing rounds

Apr 15, 2004 02:00 AM

Venezuela is working on new licensing rounds to authorize private firms to explore for and produce heavy crude oil and natural gas, Deputy Oil Minister Luis Vierma told. He said Venezuela is organizing a licensing round for seven natural gas blocks off the country's western coast, and that the government also wants to auction heavy crude exploration blocks in the Orinoco tar belt "as soon as possible”.
"We want this development to become a reality in five to six years, and that means that we have to start talking and negotiating with investors today," said Vierma, referring to new heavy crude upgrading projects in the Orinoco region. "Very soon we will hold a presentation at the level of all the companies interested in participating to explain the methodology," said Vierma.

He said any new crude projects would come under the 2001 Hydrocarbons Law, which requires state oil company PdVSA to have a controlling 51 % stake in oil projects. Venezuela currently has four joint ventures in the Orinoco tar belt. The projects blend the heavy crude from the Orinoco with lighter crudes to make the heavy crude marketable.
Concerning the natural gas blocks off the western coast, Vierma said, "we will have a licensing round very soon," and that investment in the blocks should begin around the end of 2005. The blocks are located in the Gulf of Venezuela and off the coast of Falcon state. Venezuela hopes to begin exporting LNG, or LNG, to the US and the Caribbean by 2008.

Venezuela will have a record 102 oil rigs operating by the end of this year, up from around 82 at present, said Vierma. "We will incorporate a series of rigs that will allow for deep-well drilling," said Vierma.
He said seven to eight of the new rigs will drill below 20,000 feet in oil fields in the east of the country. According to PdVSA, the country is currently producing 3.2 mm bpd in crude oil, natural gas and other products. The company hopes to lift production above 4 mm bpd by 2009.

Source: Dow Jones
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