Oil partnerships formed, eye big Venezuela project
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| Published on Friday, November 6, 2009 |
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By Marianna Parraga and Rebekah Kebede
PORLAMAR, Venezuela (Reuters) -- International oil companies have formed at least five consortiums to bid on the massive Carabobo project in Venezuela's Orinoco heavy oil belt, sources involved in the process said.
Despite fears generated by the OPEC nation's history of nationalizing oil assets, 16 companies have expressed interest in bidding on the massive Carabobo project.
"The consortiums are ready," one of the sources said at the third World Heavy Oil Congress.
The bidding round, the country's first in a decade, will take place between January 12 and 18, after repeated delays since the project was announced last year.
Carabobo is eventually expected to produce 1.2 million barrels per day from seven blocks in the Orinoco heavy oil belt.
China National Petroleum Corporation, currently developing the Junin 4 block of the Orinoco, plans to partner with the French Total, which has operated a heavy crude upgrader for years, according to the sources.
CNPC, whose presence in the South American nation has grown due to political ties between Caracas and Beijing, will make a separate bid with Sinopec, another Chinese company.
The American Chevron will partner with three Japonese companies and the Venezuelan Suelopetrol, while Spain's will partner with Malaysia's Petronas and India's ONGC.
The Portuguese Galp Energia is negotiating a partnership with Norway's Statoil STO.OL. Petrobras was expected to be part of that partnership, but sources said the likelihood of that occurring has decreased in the last few weeks.
London-based BP will bid alone and the British-Dutch Shell RDSa.L, which has not yet made a firm decision, will also bid alone if it decides to participate in the tender.
Russian participation in the tender is unlikely due the commitments it has made to develop other areas of the Orinoco, the sources said.
International companies have repeatedly stressed that the success of the Carabobo project will depend heavily on the terms and the conditions set by Caracas.
Anders Hatteland, president of Statoil in Venezuela said that Statoil's participation in the upcoming Carabobo tender depends on the terms and conditions set by Venezuela.
"I hope the ministry will understand what will be required to attract foreign capital," Hatteland said at the World Heavy Oil Congress.
Earlier this week, Chevron's president of Africa and Latin America exploration, Ali Moshiri told Reuters that the fiscal terms of the deal are key.
"What's the government's willingness to share? We believe it has to be fair if we want this partnership to last 40 or 50 years," Moshiri said.
Venezuelan President Hugo Chavez's practice of nationalizing of oil company assets has made some investors wary of participating, experts say.
Last month, Venezuela made an attempt to boost the deal's attractiveness by reducing the royalty rate to 20 percent from 30 percent, depending on the profits generated.
In October, the South American nation extended the timeline of the project, allowing four years instead three for the construction of upgraders, which will cost at least $6 billion.
Carabobo is an integral part of Caracas' plan to develop the large oil reserves in the Orinoco region, which it hopes will boost production by 40 percent from 3.04 million bpd to 4.25 million bpd by 2015. | | | | Reads : 393 | | | |
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