ARCO has sold its 30% working interest in the Hamaca integrated heavy oil project in Venezuela`s oil belt to two of its partners in the joint venture.
The Hamaca partners had decided on June 30 to proceed with the project following a temporary delay caused by extended low oil prices.
Phillips Petroleum Co. acquired two thirds of ARCO`s Hamaca interest in an asset exchange deal. Phillips traded its 18% working interest in Field LL-652 in Venezuela`s Lake Maracaibo for the portion of ARCO`s Hamaca stake. The move increases Phillips` Hamaca interest to 40%.
Texaco Inc. acquired the remaining third of ARCO`s Hamaca interests, bringing its share to 30%. The other Hamaca partner, Petroleos de Vene- zuela SA, owns the remaining 30% interest in the project.
Phillips and Texaco say their respective acquisitions are proof of their dedication to working in Venezuela.
"This exchange reflects our commitment to Hamaca`s success," said Kirby Hedrick, Phillips`s executive vice-president of upstream. "...This strongly supports our strategy of adding low-cost, long-life reserves to our global portfolio."
John J. O`Connor, president of worldwide exploration and production for Texaco, said, "Texaco`s expanded interest in Hamaca is a demonstration of our confidence in the Venezuelan energy sector. The project leadership`s commitment to innovation and creative problem-solving will make Hamaca one of the most profitable projects in the Orinoco (region)."
Development
The Hamaca partners manage the project through a joint operating company known as Petrolera Ameriven.
The project encompasses a 400 sq mile region of the Orinoco belt that is believed to contain more than 31 billion bbl of oil, of which about 2 billion are recoverable with conventional technology, Phillips says. Production of 36,000 b/d is scheduled to begin in mid-2001, will increase to 190,000 b/d in 2004, and is expected to remain at that level for 35 years, Phillips says.
"Hamaca is a strong project with an unusually flat, long-term production profile," said Hedrick. "Modern, horizontal well technology, with which Phillips has considerable experience, will enable us to produce at low cost and high efficiency for a number of years."
Total cost involved in taking the project to the peak production level is $3 billion, says Phillips.
"The efforts of the project coventurers will now focus on final design work, construction activities, and securing project financing," said Texaco.
The next phase of work will involve construction of: production facilities; a 144-mile pipeline from these facilities to Jose, Venezuela; and an upgrader at Jose. This work will begin in second quarter 2000.
Production will begin, however, before the upgrader is completed. During construction of the upgrader, early production of 36,000 b/d will be blended with 20,000 b/d of 30° gravity oil. The resulting 16° gravity oil will be transported to export facilities at Jose.
The upgrader is expected to start producing 26° gravity oil in 2004.
