Eric Watkins
Senior Correspondent
LOS ANGELES, Mar. 15 -- State-owned Petroleos de Venezuela SA (PDVSA) will work with Japan's JGC Corp. on basic engineering for a deep conversion project at PDVSA's 200,000 b/d refinery at Puerto la Cruz.
In a statement, PDVSA said the project—to be completed in 2008—involves adding new technology to enable the refinery to process extraheavy oil from the Orinoco tar belt instead of the lighter crude oil it now processes.
PDVSA said the Puerto la Cruz expansion, estimated to cost $1.7 billion, will enable the facility to refine an additional 80,000-90,000 b/d of heavy crude.
The government of Venezuelan President Hugo Chavez has been implementing a program to nationalize the country's oil industry, including sectors producing the heavy crude to be processed at Puerto la Cruz.
The government this week warned it will assume control of operations unilaterally if the companies do not cooperate by May 1. "If by the deadline there is no agreement, we will take direct control of all these operations," said Energy Minister Rafael Ramírez.
On Mar 12 ExxonMobil said it would participate in a transition committee to oversee the transfer of its control of the Cerro Negro heavy crude facilities in the Orinoco belt. The facilities, which convert tar oil into high-value synthetic crude, are valued at $31 billion.
ExxonMobil and PDVSA each own a 41.7% stake in the venture, with the remaining 16.6% held by BP. In partnership with PDVSA, ExxonMobil and BP invested some $17 billion into Venezuela to set up the Orinoco projects in the 1990s.
Contact Eric Watkins at [email protected].