Harvest Natural Resources signs natural gas contract with PDVSA for Uracoa field's production

By OGJ editors

HOUSTON, Sept. 26 -- Houston-based Harvest Natural Resources Inc. (HNR) announced a contract to sell natural gas to Venezuela's state oil firm Petroleos de Venezuela SA, accelerating development of Uracoa field in eastern Venezuela.

Formerly Benton Oil & Gas Co., HNR has been involved with the South Monagas unit for 10 years since it won rights to participate in Venezuela's marginal field reactivation program (OGJ, June 29, 1992, p. 40). Uracoa field has produced oil for years, but there was no market for the natural gas until now.

HNR Pres. and CEO Peter J. Hill said, "We are the first US independent oil and gas company to participate in the emerging Venezuela domestic natural gas market. . .This natural gas contract will also allow us to lower overall unit operating costs due to a higher product throughput and the elimination of expenses associated with reinjection and other natural gas handling costs. . .We will be able to efficiently accelerate oil production without concern for producing excess natural gas."

Uracoa field is in the south-central portion of the state of Monagas, about 10 km southeast of Temblador, 40 km southwest of Tucupita, and 125 km southeast of Maturin (OGJ, July 31, 2000, p. 35).

PDVSA's contract is with HNR's 80%-owned subsidiary Benton-Vinccler CA, Maturin, Venezuela. Starting in the fourth quarter of 2003, gas will be sold to PDVSA primary for industrial use by aluminum and concrete plants, a Harvest Natural Resources spokesman said.

Terms calls for the delivery of up to 198 bcf of natural gas through July 2012 for $1.03 Mcf. This contract prompted HNR's independent petroleum engineer to add 198 bcf of gas reserves to Benton-Vinccler's proved reserves. For HNR, this is a net addition of 158 bcf.

HNR plans an initial capital investment of $25 million in 2003 to build a 54 mile pipeline to deliver the natural gas to a PDVSA pipeline, modify the Uracoa field processing plant, and provide other infrastructure.

The company also expects to invest an additional $21 million starting in 2004 for a natural gas pipeline, infrastructure, and drilling in Bombal field to sustain the gas production profile through the end of the contract.

Gas sales are expected to start at a rate of 40-50 MMcfd in fourth quarter of 2003 and gradually increase to 70 MMcfd in 12-18 months. Initial gas production will come from Uracoa field where 100 wells have been drilled through the natural gas cap.

The field is producing 40 MMcfd of associated gas that is being reinjected. Additional oil production initially will come from the 10-12 oil wells in Uracoa field that are presently shut-in because of their high gas-to-oil ratio. Harvest Natural Resources expects to increase oil production by drilling infill wells.

Production of the gas cap is projected to provide incremental oil volumes. As a result of this expected increase, Harvest Natural Resources agreed to sell 4.5 million bbl of oil to PDVSA at a price of $7/bbl during the gas contract's duration.

Related Articles

Study says most of California's fracturing done in Kern County

01/26/2015 Almost all hydraulic fracturing done in California happens in the southwest portion of the San Joaquin basin in Kern County, said a scientific stud...

Watching Government: This year's 'infrastructure' matters

01/12/2015 In one of the busiest Decembers ever for oil and gas in the nation's capital, one word-infrastructure-kept popping up as a key challenge for 2015.

For the US economy, a falling oil price has drawbacks, too

01/05/2015

Cheer in the US about an economic lift from falling oil prices needs qualification.

Russia sanctions realign Arctic exploration, geopolitics

01/05/2015 The latest Western sanctions on Russia's Arctic gas industry, including OAO Gazprom and OAO Novatek, have had a geopolitical impact on the Kremlin....

Trinidad and Tobago to develop ‘master plan’ for gas development

12/29/2014 Trinidad and Tobago’s government has hired UK-based consulting firm Poten & Partners to develop a natural gas master plan for the Caribbean twi...

Woodside to buy Apache's interests in Wheatstone, Kitimat LNG for $2.75 billion

12/22/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

EIA: US proved oil, gas reserves continue to climb

12/15/2014 US proved reserves of oil and natural gas have increased by 9% and 10%, respectively, according a recent report from the US Energy Information Admi...

Falling prices may pose new test for China oil policies, speakers say

12/15/2014 China, which successfully revised its oil strategy in response to new technologies since 2008, could face fresh tests if prices stay low for a prol...

Encana plans to hit the ground running in Permian

12/12/2014 Encana Corp. has announced its second major acquisition in a Texas oil play this year, agreeing in September to acquire Permian basin-focused produ...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected