PDVSA TARGETING ASIA, LATIN AMERICA IN NEW BUSINESS PLAN

Petroleos de Venezuela SA (Pdvsa) is targeting new markets in Asia and Latin America for its crude oil and refined products under a new 10 year business development plan. Pdvsa Pres. Gustavo Roosen sees relatively slim prospects for growth in the U.S. and Europe, where it is already well established. Accordingly the company must seek new markets with strong growth potential in order to place the 3.1 million b/d of crude and products it expects to be exporting by 2003.

Aug. 23, 1993

3 min read

Petroleos de Venezuela SA (Pdvsa) is targeting new markets in Asia and Latin America for its crude oil and refined products under a new 10 year business development plan.

Pdvsa Pres. Gustavo Roosen sees relatively slim prospects for growth in the U.S. and Europe, where it is already well established. Accordingly the company must seek new markets with strong growth potential in order to place the 3.1 million b/d of crude and products it expects to be exporting by 2003.

As part of this push, Pdvsa is reviewing the possibility of laying a pipeline from Venezuela to Panama, which would give it better access to Pacific ports, Roosen said. Roosen noted the concept has been around for some time but is not a priority for now.

One product targeted for expansion in Asia is Orimulsion, the Venezuelan state company's boiler fuel that is a blend of bitumen, water, and a surfactant. It has a joint venture with Mitsubishi Corp., MC Bitor Ltd., to market the fuel in Asia.

FOREIGN INVESTMENT KEY

Pdvsa's new 10 year plan, to be approved by the government this month, continues to rely on substantial foreign investment in its oil, gas, petrochemical, and coal sectors.

Pdvsa hopes to develop crude oil productive capacity of 4 million b/d by about 2000, up from 2.8 million b/d currently. Oil production is projected to reach 3.6 million b/d and exports 3.1 million b/d in 2003. Pdvsa exports of crude and refined products in first half 1993 averaged 2.03 million b/d at $14.57/bbl. That puts the petroleum export total at about $5.4 billion, about 11% below the government target. For the year, the government is targeting 2.075 million b/d at $15.70/bbl for a total of $11.9 billion vs. $11.2 billion in 1992.

Pdvsa and Venezuela's Energy Ministry expect Venezuela to have about 10% of total production within the Organization of Petroleum Exporting Countries within 10 years.

Roosen said the plan will require total investment of $47 billion, of which Pdvsa hopes private investors, mainly multinational companies, will supply $16 billion. While Pdvsa has studied different types of production sharing agreements with private companies that could be applied to development of light and medium gravity crude deposits, any concrete proposals of that nature will have to be handled by the next administration and the next congress, Roosen said.

NO POLICY CHANGE

The interim government of President Ramon J. Velasquez is making no changes in the oil policies developed under former President Carlos Andres Perez.

His decision to keep Perez's Energy Minister Alirio Parra in the cabinet was a clear sign of support for those policies,

Perez was forced to resign at the end of May to face corruption charges.

It was under Perez, who was to have ended his 5 year term in February 1994, that 'Venezuela opened its upstream petroleum sector to private equity investment the first time since nationalization in 1976.