New Venezuelan gas law will promote private investment

Jun 10, 2005 02:00 AM

Venezuela's foreign minister Ail Rodriguez has defended the new gas law that allows 100 % private participation in natural gas projects, saying that the oil and power sectors need the fuel to grow.
A former president of state oil company PdVSA, Rodriguez made the comments to lawmakers investigating alleged "irregularities" involving 32 operating agreements between PdVSA and foreign operators.

Natural gas is cheaper than fuel oil for power generation, Rodriguez told the lawmakers. However, the bulk of the country's gas reserves are located offshore and Venezuela lacks the technical know-how in this type of exploration and production.
Rodriguez said that 91 % of the 147 tcf of the country's gas reserves is associated, meaning that it shares deposits with oil.

Venezuela passed the gaseous hydrocarbons law two years ago, which allows for 100% private gas projects, unlike oil projects, in which PdVSA must hold a majority stake. Promoting investment in natural gas projects has become a cornerstone of President Hugo Chavez’s energy policy.
In April, 29 national and foreign energy companies bought a data pack from the energy and oil ministry for six offshore natural gas blocks to be offered in the first stage of the Rafael Urdaneta project in the Gulf of Venezuela off Falcon state in western Venezuela. Bids are due July 27.

The licenses will be for 25 years and PdVSA retains the right to obtain a 35 % stake in the projects if and when commerciality is declared.
Venezuela eventually plans to develop a liquefied natural gas (LNG) export project in eastern Venezuela on the Paria peninsula using gas from the Marisal Sucre and Deltana projects.

Source: Business News Americas
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