ARCO, Corpoven plan Venezuelan heavy oil project

ARCO and Petroleos de Venezuela SA's Corpoven SA unit have agreed to form a joint venture to undertake a $3.5 billion heavy oil project in Venezuela. Partners by 2006 expect to be upgrading as much as 200,000 b/d of 9° gravity crude from Venezuela's Orinoco belt. The upgraded 25° gravity oil will have characteristics similar to crude produced on Alaska's North Slope. Corpoven Chairman Guillermo Archila and ARCO Chairman Mike R. Bowlin set terms and conditions of the deal

Aug. 26, 1996

2 min read

ARCO and Petroleos de Venezuela SA's Corpoven SA unit have agreed to form a joint venture to undertake a $3.5 billion heavy oil project in Venezuela.

Partners by 2006 expect to be upgrading as much as 200,000 b/d of 9° gravity crude from Venezuela's Orinoco belt. The upgraded 25° gravity oil will have characteristics similar to crude produced on Alaska's North Slope.

Corpoven Chairman Guillermo Archila and ARCO Chairman Mike R. Bowlin set terms and conditions of the deal in a memo of understanding signed last week in Caracas. The strategic association is a first for Corpoven.

The Venezuelan government's executive branch will present the plan for approval to the next session of the National Congress.

The deal calls for partners to produce extra-heavy crude from the Hamaca zone south of El Tigre in Anzoategui state and transport the crude by pipeline to an upgrading plant to be built at Jose.

The estimated cost of the three-phase project includes drilling and construction of field, transportation, and upgrading facilities.

In the first phase, partners are to start oil production and lay a pipeline from the production area to the Jose upgrader. Second phase plans include construction of the first upgrading module, which partners expect to be operational in 2001.

In phase three, partners by 2006 aim to boost crude production and upgrade capacities to enable recovery of about 180,000 b/d of processed oil.