Chevron and Repsol to invest $30 billion to develop latin america’s Orinoco belt

Venezuela has awarded rights to develop the Carabobo blocks in Orinoco heavy oil belt to two consortiums led by Spanish oil company Repsol and US Chevron Corp where they will invest with its Venezuelan partner PDVSA around of 30 billion dollars in a period of 6 years to have the capacity to put in the market 900.000 barrels per day.


Porlamar, Margarita Island, Venezuela 02 11 2010

Repsol, one of the leaders of one of the winning consortiums will hold of an 11% participating interest,in the Carabobo 3 project and is partnered by India Oil and Natural Gas Corporation (11%), Petronas (11%), Oil India Limited (3.5%) and Indian Oil Corporation Limited (3.5%). PDVSA, according to Venezuelan legislation, owns the remaining 60% of the Mixed Company. The consortium won the rights to the blocks Carabobo 1 Centro y Carabobo 1 Norte

"We have won, we have offered the minimum," Nemesio Fernandez-Cuesta, Repsol's executive vice president in charge of exploration and development, told reporters.

The other winning consortium led by Chevron (34%), Japan's INPEX Corporation ( 2.5 %) , Mitsubishi Corporation ( 2.5%) and Venezuela's Suelopetrol ( 1 %) will hold a combined 40 percent interest in the empresa mixta (joint company) that will operate the Carabobo 1 project. PDVSA will hold the remaining 60 percent interest. The consortium won the rights to the blocks Carabobo 2 Sur, Carabobo 3 Norte and Carabobo 5.

Ali Moshiri, Chevron's chief for Latin America and Africa, expressed faith in Venezuela.

"We have plenty confidence in Venezuela," Moshiri said.

Each consortium will have to construct a heavy oil up grader the Soledad area in the belt with a capacity of 250.000 barrels per day to convert the 8 API grade extra heavy oil in to 22 API grade the soledad area in the belt. The oil will mix with Venezuela's other crudes to double the output production.

Another block was declared deserted and the project Carabobo 2, will be assigned to PDVSA and could be put up for bidding in a later date said at the ceremony, Rafael Ramirez energy minister and PDVSA president.

Chavez said to top executives from all the firms involved in the auction. "They say there's no type of judicial security here in Venezuela, and stuff like this, but it's not true," he said,

"You have all the guarantees for your investments, your profits and the capital that you want to repatriate." he added.

The projects are expected to have a life span up to 40 years.

PDVSA has certified that the entire Carabobo area has 25.6 billion, the rate of extraction of the projects are established in 20% and could go up to 40% with the development of new technology. Venezuela's president Hugo Chavez pointed out that the present cost per barrel of producing 22 API oil in the belt is just $7.00.

“We’re talking about 300 million barrels per project in early production. At $70 that is $21 billion,” he said. “You will invest about $400, $500 million initially and you will begin early production.” Eulogio del Pino, PDVSA vice president of exploration and production, said to Bloomberg in an interview.

Venezuela has already awarded rights on a direct adjudication for another 600.000 barrels per day of production for blocks in the Junin area of the Orinoco belt to a Russian consortium, Eni, CNPC and Petrovietnam.

Venezuela currently has proven reserves of 172.3 billion barrels of oil and hopes to increase that amount to 316 billion barrels by developing the Orinoco belt.

The country currently produces according to the Organization of Petroleum Exporting Countries (OPEC) 2.3 million barrels per day. However, according to Venezuela it currently produces three million barrels of crude per day.




Queen of Spain, President of Repsol and President of Oderco Petroleum


Spain King, President of REPSOL and President of Oderco Petroleum

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