Venezuela's National Assembly has approved the creation of two joint ventures between state-owned Petroleos de Venezuela SA and two consortia of international oil companies for the development of projects in the Orinoco heavy oil belt.
The first JV gives PDVSA a 60% share of the Carabobo 1 project, with the remaining 40% divided among Repsol, Indoil, and Petronas. The second JV, Carabobo 3, also is led by PDVSA with 60%; the remaining 40% is shared among Chevron, Inpex and Mitsubishi of Japan, and Suelopetrol CA, Caracas (see map, OGJ, Nov. 21, 2005, p. 54)..
Each of the two projects, which are to produce 400,000 b/d of oil, include the construction of a heavy crude upgrader that can turn 200,000 b/d of tar-like Orinoco oil into synthetic crude, while the remaining 200,000 b/d of Orinoco oil will be blended to produce an intermediate grade.
"The approval of the contracts by the National Assembly is essentially a formality," said analyst IHS Global Insight. "Nonetheless, it is still a significant development as these two projects alone are expected to generate $30 billion worth of investment and raise production by 880,000-960,000 b/d."
The National Assembly in mid-April also ratified an agreement to establish an oil production joint venture, called Petromiranda, that was signed on Apr. 2 by PDVSA 60% and Russia's National Oil Consortium 40%.
Russia's NOC was created to conduct operations of Russian oil and gas companies in Venezuela, and its members include Rosneft, Gazprom, Lukoil, Surgutneftegas, and TNK-BP, each with a 20% stake.
According to earlier reports, the Petromiranda JV will focus on developing the Junin-6 oil block, which has estimated reserves of 500 billion bbl of oil. Production from the block is expected to reach 450,000 b/d of heavy oil by 2017.
Commenting on the approvals by legislators, Venezuela's energy and oil minister Rafael Ramirez said the Orinoco oil belt will attract investment of more than $120 billion over the next 7 years.
The $120 billion in investment will enable Venezuela to produce 3 million b/d of crude oil in the Orinoco belt alone, said Ramirez, who added that his country already had certified oil reserves of 170 billion bbl in the belt and plans to certify a further 108 billion bbl.
Ramirez also said the Venezuelan government will continue to select partners for development of the Orinoco belt based on two approaches: public tenders and intergovernmental accords as in the case of Russian, Chinese, Belorussian, and Cuban oil firms.
Earlier this week, Japan's government-backed Japan Oil, Gas & Metals National Corp. said it will invest up to ¥32 billion by yearend 2017 in an extra-heavy Orinoco crude oil project in Venezuela, in which two Japanese companies are involved (OGJ Online, Apr. 13, 2010).
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