PdVSA to invest up to $ 13 bn this year to boost output

Jun 01, 2009 02:00 AM

Petroleos de Venezuela, the state oil company, will invest $ 12 bn to $ 13 bn this year and "at least" as much again next year as it seeks to expand crude output by about two-thirds.
Investment spending will depend on oil prices, Hercilio Rivas, the company's research and development director, said. The company needs a "floor" of $ 70 a barrel to reach a target to pump 5 mm bpd in 2020, up from 3 mm today, he said.

A 54 % drop in oil prices since a record in July forced the company to cut spending to $ 14 bn from $ 24 bn this year, PdVSA President Rafael Ramirez said in an April 28 conference call, demanding a pay freeze from workers.
PdVSA's investment plan will boost the company's output to 4.8 mm bpd by 2013, Ramirez said last year. Today's output reflects mandatory OPEC reductions, Rivas said.

Lower revenue was causing PdVSA to fall behind on payments to contractors including Williams Cos., Ensco International and Helmerich & Payne.
Helmerich is closing down rigs as contracts end, contributing to a decline in Venezuela's count of active drilling rigs to 65 in April from 82 a year earlier, according to Baker Hughes.

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