Oil firms forming consortiums to bid for Venezuela's Carabobo blocks

Nineteen companies that have shown interest in the tender for Venezuela's Carabobo heavy crude blocks are jostling to form consortiums to present bids for the three areas on offer, industry sources said.
The Carabobo Project aims to build three upgraders to turn the Orinoco belt's tar-like crude into oil for exports and produce around 200,000 bpd, with the initial investment seen between $ 10 bn and $ 20 bn per area. A number of possible partnerships are in the works, although none are finalized, company and government sources with knowledge of the process told.

A partnership between state-run China National Petroleum Corp (CNPC) and France's Total is on the table along with another between CNPC and refiner Sinopec also being discussed. Chevron is evaluating working with a Venezuelan company, which limits its options to Suelopetrol, the only Venezuelan company registered in the pre-bidding process.
Another partnership in the works is between Colombia's Ecopetrol, Malaysia's Petronas and Spain's Repsol, with Portugal's Galp Energia, Brazil's Petrobras and Norway's Statoil.

The oil ministry said it postponed issuing final conditions of the bidding process, delaying presentation of the consortiums and which areas they may bid for. The companies are assessing the investments needed to develop the areas, ranging from $ 10 bn to $ 20 bn depending on the complexity of the respective blocks.
The upgraders are likely to cost $ 6 bn or $ 7 bn, but the cost of technology required to meet the ministry's demand that the companies extract 20 % of each field's reserves will vary. The companies must also pay a one-off premium of between $ 500 mm and $ 1 bn to operate the projects, along with royalties and taxes, which the companies hope will be lowered.