Thursday, August 10, 2006

CARACAS, Venezuela (AFP): Venezuela has launched international bidding for licenses to explore and operate four potentially gas-rich offshore blocks in the Caribbean identified by the state energy group, Energy Minister Rafael Ramirez said.

The announcement comes as Venezuela, home to the largest gas reserves in South America, becomes more active in gas production, processing and transportation, with partners as near as Brazil and as far as Russia.

The three Caribbean blocks are 320 kilometers (200 miles) north of Las Margaritas islands, and a fourth is in Punta Pescador, in the Orinoco River delta, 500 kilometers (300 miles) east of the capital, and were identified by state-owned Petroleos de Venezuela, known by its Spanish initials as PDVSA.

Ramirez called the parcels "potentially high-yield and low-risk" deposits of "in the order of 11 billion cubic feet of gas", or 311.5 million cubic meters.

In addition to its mammoth gas reserves, Venezuela is the world's ninth producer of crude oil and the only South American member of the Organization of the Petroleum Exporting Countries cartel.

Ramirez said Tuesday that Venezuela's proven reserves would soon reach 196 trillion cubic feet, and would reach 11 billion cubic feet by 2023.

"The Great Southern Gas pipeline will require large amounts of gas," he said, to serve customers in Argentina and Uruguay.

He said that between 2009 and 2010, Bolivia and possibly Peru would contribute 30 million cubic feet of gas to fill the pipeline. Bolivia has South America's second-largest gas reserves.

Ramirez expects investments in the four PDVSA blocks to total at least 172 million dollars, from exploration to drilling and production.

PDVSA offered the foreign companies 65 percent ownership of the three blocks and 30 percent in the fourth, all lasting 20 to 35 years.

Thirty-six companies were invited to bid, including Chevron, ConocoPhillips and Exxon Mobil of the United States; the British-Dutch giant Royal Dutch Shell; Gazprom and Lukoil of Russia, Petropars of Iran, Petrobras of Brazil, Statoil of Norway and Teikoku of Japan.

Late last month, at a Venezuelan-Russian summit, Gazprom signed a contract with Venezuela to help develop of the South American country's gas sector.

Also this week, Brazil's state energy giant Petrobras announced plans to invest two billion dollars in a natural gas project in Venezuela sometime this year, with PDVSA to jointly develop natural gas deposits in the Mariscal Sucre region and build a liquefied natural gas processing plant, to be operational in 2011.

The entire project will cost five billion dollars, according to local reports, with PDVSA holding 65 percent and Petrobras 35 percent of the operation.

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