Upstream activity is gathering momentum in Venezuela.
Lagoven SA, a unit of state owned Petroleos de Venezuela SA. (Pdvsa), outlined plans to expand exploration and production programs in eastern Venezuela. Those plans include foreign and private domestic investment in areas targeted by Pdvsa under its marginal fields and profit sharing programs.
They reflect Lagoven's bid to jump oil production in the region to 660,000 b/d by 2000 from the current 400,000 b/d.
In western Venezuela, Pdvsa unit Maraven SA reported a private foreign/domestic group started operations to reactivate four marginal oil fields.
The marginal fields program got under way in 1992 to attract private companies to participate in reactivating Venezuela's idle or otherwise subcommercial oil fields via operating/service contracts (OGJ, June 29, 1992, p. 40). Thus Pdvsa can boost the country's oil production without further straining its budget.
The government aims to increase Venezuela's oil production to 4 million b/d by 2000 from the current 2.4 million b/d.
The profit sharing program focuses on higher risk, higher reward exploration and development in direct participation ventures between Pdvsa units and foreign companies.
A much more controversial measure because of the direct participation aspect, the profit sharing program is under debate by Venezuela's congress.
Until those programs were developed, Venezuela had forbidden participation by private companies in its upstream sector since 1976, when the petroleum industry was nationalized.
Meantime, Pdvsa unit Corpoven SA is expanding its crude oil and refined products exports to Brazil.
LAGOVEN PLANS
Lagoven's plans target undiscovered oil resources in eastern Venezuela estimated at 3.8 billion bbl.
Most of this potential lies in five operating areas in Monagas, Anzoategui, and Sucre states. The five areas, which also hold 83% of Lagoven's total proved oil reserves, also will be offered for exploration and development work to private companies under the profit sharing program.
Most of Lagoven's exploratory work and 63% of its projected exploratory spending the next 6 years will focus on Monagas state, said Eugenio Lopez, Lagoven operating contracts manager.
Lagoven's eastern division will drill 52 wells in North, Central, and East Monagas state at an estimated cost of $541.18 million. Monagas upstream spending will total $388.2 million in 1995.
That represents an increase of $147.5 million from 1994.
Lagoven Eastern Division Manager Juana Albornoz attributed much of the increase to stepping up production in the El Furrial, Uricual, and Jusepin oil producing areas as well as an overall increase in exploration in Monagas state.
Lagoven Exploration Manager Julian Castro noted much of the exploratory focus will center on light and medium gravity oil prospects in northern and eastern Monagas.
That follows the 19 million bbl reserve of 26.6 gravity oil the Las Piedritas discovery found there in 1994.
The find raised expectations of similar prospects in the area with potential reserves postulated at 360 million bbl of light and medium crude, Castro said.
Included in the 1995 capital spending plans is $117.64 million earmarked to develop a deepwater tanker terminal at Guiria on the northernmost tip of Venezuela.
The 1995 Lagoven spending estimates do not include $241.7 million projected for operating/service and joint venture contracts with private firms.
Also excluded from the estimates is $141.17 million earmarked for investment in Orimulsion, an emulsion of extra heavy Orinoco belt crude, water, and a surfactant, sold as a boiler fuel.
In addition to foreign participation in Orimulsion projects, foreign companies have signed several multibillion dollar deals to develop extra heavy crude in the Orinoco belt and upgrade it to a higher quality synthetic crude (see related story, p. 33).
Other areas in eastern Venezuela marked for increased exploration are Sucre and Delta Amacuro states.
Lagoven is involved in operating/service contracts in the marginal fields program with British Petroleum plc, Total, and foreign/domestic combines of Maxus Energy Corp./Otepi Consultores SA, and Benton Oil & Gas Co./Vinccler SA (see map, OGJ, Sept. 26, 1993, p. 42).
MARGINAL FIELDS PROJECT
A group led by a unit of Samson Investment Co., Tulsa, began operations last month to reactivate four marginal oil fields in western Venezuela's Falcon state.
Samson and Venezuelan companies Vepica, Ingenieria 5020, and Petrolago will spend about $14 million the next 3 years to reactivate the idle fields owned by Maraven.
Vepica specializes in design, management, and construction in the petroleum/petrochemical sector. Petrolago is involved in pipeline and flow station construction. Ingenieria 5020 is part of a civil engineering group.
Maraven expects the four fields to produce a combined 1,500 b/d of light crude and about 2 MMcfd of gas, with gas flow expected to jump to 40 MMcfd by 2000. Some of the gas will help meet demand at Maraven's Cardon refinery.
The Western Falcon Unit the group is working in hold,; Tiguaje, Hombre Pintado, El Mene, and Media fields.
The group signed the initial operating service contract in November 1994, which outlined the scope of operations. It signed a definitive contract last month that includes agreements on procedures for billing, service and labor contracting, bidding, crude and gas measuring, and auditing.
The Western Falcon project is Maraven's third reactivation project. A unit of Occidental Petroleum Corp. early in 1994 began operating the Western Zulia marginal fields project and has boosted production to 13,000 b/d from 5,000 b/d.
A group of companies from four countries last month started work in the producing Colon unit of Zulia state (OGJ, May 29, p. 20).
EXPORTS TO BRAZIL
Pdvsa's third operating unit, Corpoven SA, plans to double sales of crude oil to Brazil this year.
Plans call for exporting 50,000 b/d of Leona medium gravity crude, 30,000 b/d of Mesa light, 10,000 b/d of Mercy heavy, and 5,000 b/d of extra heavy crude.
Corpoven sold 50,000 b/d of crude to Brazil in 1994 and 6,000 b/d in 1993.
In addition, Corpoven expects to sell 12,000 b/d of gas oil and 4,000 b/d of A-1 jet fuel to Brazil this year,
Corpoven is shipping the crude via the Guaraguao marine terminal at Puerto la Cruz to Petroleos Brasileiro SA, the Brazilian state oil company, for processing in its 12 refineries. Corpoven ships overland about 73,000 bbl/month of gas oil to the Brazilian city of Boa Vista.
After a restructuring of unit responsibilities in 1993, Corpoven was assigned responsibility for supplying oil to Brazil and since has sought to increase its market share in that country.
Although Brazil is a significant oil producer, it imports about 500,000 b/d of crude.
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