Venezuela’s national oil company Petroleos de Venezuela SA is reported to have shut down ExxonMobil Corp.’s La Ceiba oil field in Venezuela by canceling the lifting of about 12,000 b/d of production.
ExxonMobil spokesman Richard N. Bailey said the oil major received an e-mail alert from PDVSA about the shutdown. The company has appealed to the Ministry of Energy and Mines for a temporary and safe halt to production.
Petro-Canada, ExxonMobil’s 50-50 partner in La Ceiba, said its production had already been shut in.
PDVSA gave no reason for its decision to halt the loading of oil from La Ceiba, but the action is the latest in a series of events targeting ExxonMobil, the only major oil company to challenge the 2004 royalty increase on heavy oil production and the only one to sell its interest in a field to avoid having to negotiate a new contract with PDVSA as the operator.
ExxonMobil, La Ceiba operator, has ceased investments and has postponed drilling in the country. PDVSA last month removed ExxonMobil from a multibillion-dollar petrochemical project, maintaining the company was holding up the project launch.
PDVSA reported Mar. 1 that ExxonMobil has sold its 25% interest in the Quiamare-La Ceiba field in Venezuela to Repsol YPF SA. The field, located in Anzoategui, produces about 15,000 b/d of oil.
PDVSA said Repsol YPF SA has agreed to migrate the terms of the field’s contract to a joint venture that PDVSA will control, in accord with recent changes in the country’s hydrocarbons law. Repsol YPF already held the remaining 75% interest in the Quiamare-La Ceiba field complex and has purchased the remaining 25% from ExxonMobil’s local representative, Ampolex Venezuela.
ExxonMobil’s was the last holdout of the 32 service contracts originally issued to private operators for the production of oil in Venezuela. It refused to accept the ministry of petroleum’s ultimatum to transfer its interest in the field complex by yearend 2005 and was unwilling to allow PDVSA to assume control of the asset.
PDVSA now holds an average of 60% interest in all 32 joint venture agreements, which represent about 532,000 b/d of oil production.
PDVSA said in January it has appointed 32 executive committees to supervise operations under the new joint ventures between itself and foreign operators to assure a continuity of activities.
Minister of Energy and Petroleum and PDVSA Pres. Rafael Ramirez said, “From Jan. 1, 2006, there will no longer be operating agreements, only joint ventures. Already we have signed 22 transitional agreements with a number of companies. The executive committees will be composed of five members: three from PDVSA and two from the operators who have migrated their contracts to joint operations.”
Ramirez said he is confident the remaining companies operating in Venezuela will complete the migration of their contracts before yearend. Otherwise, he said, PDVSA will assume the operations.
“Venezuela will be saving nearly $3 billion in contrast with the $4 billion disbursed in 2005 for operating agreements,” he said. “Just as the constitution of the republic says, no one can compromise Venezuela’s petroleum reserves, they are the property of the state.”✦
