CONOCO, MARAVEN TEAM FOP FIRST BIG ORINOCO HEAVY OIL PROJECT

Venezuela's cabinet has approved a $1.7 billion project by Conoco Inc. and Maraven SA to produce and upgrade heavy oil from Venezuela's Orinoco belt. Meantime, Maraven parent Petroleos de Venezuela SA (Pdvsa) plans to boost the country's crude oil productive capacity to 3 million b/d by yearend from 2.83 million b/d at yearend 1992. In addition, Pdvsa plans to sell a variety of nonoil assets to reduce debt and raise funds for capital spending, including electrical power generation

April 12, 1993

3 min read

Venezuela's cabinet has approved a $1.7 billion project by Conoco Inc. and Maraven SA to produce and upgrade heavy oil from Venezuela's Orinoco belt.

Meantime, Maraven parent Petroleos de Venezuela SA (Pdvsa) plans to boost the country's crude oil productive capacity to 3 million b/d by yearend from 2.83 million b/d at yearend 1992.

In addition, Pdvsa plans to sell a variety of nonoil assets to reduce debt and raise funds for capital spending, including electrical power generation facilities.

Sale of noncore assets, including service companies, is expected to raise $2-3 billion. Pdvsa is preparing a list for international bidding.

OPERATING PROJECTIONS

Among other operating projections for 1993, Pdvsa expects to:

Increase proved reserves by 823 million bbl of crude oil and 164 bcf of natural gas from 1992 levels of 62.53 billion bbl and 130.2 tcf. Proved reserves in 1992 were down 118 million bbl and up 3.7 tcf from 1991 levels.
Spend about $234 million on exploration, split 68.2% for exploratory drilling and 31.8% for geophysical work. Plans call for drilling 18 wildcats and one stratigraphic test.
Drill 370 delineation and development wells, work over 1,780 wells, and put steam away in 640 wells.

ORINOCO PROJECT

The Orinoco project, still to be approved by Venezuela's congress, features several firsts.

It will represent the first direct investment by a private company in Venezuela's oil producing sector since nationalization in 1976. Other recent deals that entail private company participation in Venezuela involve a project to develop offshore natural gas and export it as liquefied natural gas and a slate of operating service contracts to develop or revive marginal fields. It also is the first of several strategic associations Pdvsa hopes to form with major oil companies to obtain money to develop its massive heavy oil deposits. Aside from Pdvsa's Orimulsion boiler fuel program, it will be the first full scale exploitation of the Orinoco belt, considered the world's biggest known accumulation of extra heavy crude and bitumen.

Plans call for producing 120,000 b/d of 9 gravity crude from Maraven's Zuata production zone in Anzoategui state, diluting the crude with kerosine, and moving it 210 km by pipeline to facilities at Jose on the coast operated by Pdvsa petrochemical unit Pequiven.

The partners also will build an upgrading plant that includes a hydrotreater and delayed coker to produce 102,000 b/d of 20 gravity crude and 3,000 metric tons/day of petroleum coke. All the upgraded crude and coke are to be exported.