Venezuela reclaims oil company acreage

Venezuela reclaimed more than 27,000 sq km formerly licensed by oil companies last month by requiring them to join new state-controlled joint ventures, El Tiempo newspaper reported.

April 20, 2006

Peter Howard Wertheim
OGJ Correspondent

RIO DE JANEIRO, Apr. 20 -- Venezuela reclaimed more than 27,000 sq km formerly licensed by oil companies last month by requiring them to join new state-controlled joint ventures, El Tiempo newspaper reported.

Companies operating 32 oil fields were required to form ventures with the state oil company, Petróleos de Venezuela SA, (PDVSA) as part of the Venezuelan government's effort to boost its share of oil revenue (OGJ Online, Apr. 10, 2006).

Under the new terms, PDVSA took at least a 60% stake in each field, hiked taxes and royalties, and took back acreage, noting the areas were ones in which companies had failed to invest.

According to El Tiempo, Eulogio del Pino, a PDVSA director, said companies were compensated a total of $900 million in investment bonds that can be used in the new joint ventures under a program not yet fully defined.