Chevron Corp. and Maraven SA have formed an alliance to further develop Venezuelas giant Boscan oil field and supply heavy crude to Chevrons U.S. refineries.
Under the alliance, Chevron will operate Boscan heavy oil field and may spend $2 billion in 20-30 years. The alliance covers an initial term of 20 years with a 10 year extension option.
In addition, Maraven will become a partner with Chevron in a West Coast asphalt joint venture while supplying heavy crude for Chevrons 295,000 b/d Pascagoula, Miss., refinery and asphalt plants at Perth Amboy, N.J., Portland, Ore., and Richmond Beach, Wash.
Chevron found Boscan field in 1946. Venezuela nationalized its petroleum industry in 1976 and placed it under the aegis of state owned Petroleos de Venezuela SA, Maravens parent. In recent years, Venezuela has taken steps to again attract private investment in its petroleum sector, including some ventures that represent the first private investment in Venezuelas upstream sector since nationalization.
Chevron said it is the first foreign company since 1975 to be responsible for such a high level of hydrocarbon production in Venezuela.
Whats involved
Chevron and Maraven have structured an operating service agreement to assure continued Boscan development.
Plans call for hiking Boscan output the next 3 years to 115,000 b/d of 10 gravity crude from the current 80,000 b/d. Remaining proved reserves are pegged at 1.6 billion bbl.
Chevron will be responsible for operations and production, and Maraven for marketing the crude.
Meantime, units of Chevron and Maraven will form a partnership to acquire and process feedstock into asphalt and other products for sale in the U.S. West. The venture, Chevron Ven Asphalt Alliance, will hold a processing and service agreement with Chevron U.S.A. Products Co., which will retain its West Coast asphalt refineries and perform supply, processing, and marketing functions on behalf of the new venture.
Chevron expects the venture to result in increased asphalt production and new marketing opportunities.
The partners have set up these supply deals:
- At Pascagoula, an initial supply of Venezuelan heavy crudes in excess of 15,000 b/d with provision for increase.
- At the 80,000 b/d Perth Amboy refinery, enough various Venezuelan crudes to produce about 10,000 b/d of asphalt.
- At the 14,000 b/d Portland and 5,700 b/d Richmond Beach plants, Maraven will supply Boscan crude to support an undisclosed volume of asphalt.