Petrodelta to be very active in coming months

Nov 02, 2007 01:00 AM

The newly formed Venezuelan joint venture Petrodelta will be very active over the next few months, the CEO of Houston-based Harvest Natural Resources, James Edmiston, told. Venezuelan President Hugo Chavez on October 25 signed the deal creating Petrodelta, in which state oil company PdVSA has a 60 % stake and Harvest's 80 %-owned Harvest Vinccler 40 %.
"We are implanting the transfer of all administrative and operational activities that were previously managed by Harvest Vinccler during the transition period," Edmiston said. Petrodelta will soon sign the contract for the sale of hydrocarbons to PdVSA, Edmiston added.

As soon as the contract is signed, Petrodelta will be able to invoice PdVSA for oil and gas production dating back to 2006, and Petrodelta will then distribute a dividend to shareholders that include Harvest. Petrodelta also will invoice PdVSA for oil and gas production on a monthly basis instead of a quarterly basis. PdVSA will have two months to pay Petrodelta on receipt of invoice.
Petrodelta's short-term business plan will seek to increase rapidly oil and gas production, convert possible reserves to proven reserves, conduct new exploration and increase "synergies" at all scales of the operation, Edmiston said. Petrodelta has two workover rigs and one drilling rig under contract. The acquisition of new rigs would not be a problem, Edmiston said.

Petrodelta is bidding for a second drilling rig and will begin bidding for a third in early 2008. Oil production in the fourth quarter of 2007 is expected to average 13,500 bpd, but Edmiston said Petrodelta aims to return to the company's pre-conversion production of around 30,000 bpd. Harvest, meanwhile, is continuing to look for new opportunities inside and outside of Venezuela, and is interested in assets where current production remains a fraction of the asset's potential, Edmiston added.
"We expect further consolidation in the mixed companies to occur in Venezuela and Petrodelta is well positioned to act as a consolidator," he added.

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