PdVSA signs deal with Neptune to drill offshore gas wells

Oct 26, 2007 02:00 AM

State oil company Petroleos de Venezuela, or PdVSA, has signed a deal to drill 21 natural gas wells off the coast of Venezuela as part of its Mariscal Sucre gas project.
The company signed a four-year contract with Neptune Marine Oil & Gas, a drill-ship company based in Singapore, for $ 785 mm, the company said. A Neptune drill ship will begin work in Venezuelan waters starting in February.

The Mariscal Sucre project is the cornerstone of President Hugo Chavez's plan to generate natural gas for local consumption, but development is slow.
PdVSA and Brazil's Petroleo Brasileiro, or Petrobras, are expected to jointly develop the four Mariscal Sucre gas fields, but so far the companies have yet to settle the terms of investment or a production plan. The project is estimated to cost between $ 2.5 bn and $ 3 bn.

Petrobras and Venezuela have been known to differ on the destination of gas sales. Petrobras wants to sell most of it as liquefied natural gas, while PdVSA favours selling the bulk of production domestically, for much lower prices.
PdVSA has said it wants to begin production in late 2010.

Source: Dow Jones & Company
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