Venezuela lowers 2015 forecast oil capacity 13 percent
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| Published on Wednesday, November 4, 2009 |
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By Marianna Parraga and Rebekah Kebede
PORLAMAR, Venezuela (Reuters) -- Venezuela's energy minister on Tuesday lowered the South American OPEC member's 2015 oil capacity target by 13 percent, but remained upbeat on expansion overall, especially in the Orinoco heavy oil belt.
Rafael Ramirez told an oil conference on the island of Margarita that Venezuela's capacity should rise from 3.0 million barrels per day now to 4.25 million bpd by 2015.
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| Venezuela's Energy and Petroleum Minister Rafael Ramirez. AFP PHOTO |
That is a significant reduction from a previous target, set in 2008, of 4.9 million bpd for 2015. In 2005, when Venezuela launched a new investment plan, it had set an even higher goal of producing 5.8 million bpd within a decade.
Ramirez gave no reasons for the reduced target, but it came after four years of decline in Venezuela's crude production, according to the country's own estimates.
Between January and September 2009, Venezuela pumped 3.04 million bpd, 130,000 bpd less than planned, according to figures from state oil firm PDVSA.
Ramirez emphasized that Venezuela is investing $15 billion a year in its oil sector, and will focus on the Orinoco belt.
"We have had a world oil market situation that has forced us to optimize our investments," Ramirez said.
PDVSA's profits plummeted 54.3 percent in the first quarter of 2009, as crude prices waned and the global economic slowdown kept demand weak.
Ramirez added that capacity should rise to 6.862 million bpd by 2021.
Analysts do not, however, share the government's optimism, saying steep declines at older fields combined with obstacles to new heavy crude development could keep production flat for years to come.
Venezuela has announced a raft of new projects in the Orinoco heavy oil belt, but analysts are nervous about the inexperience of major partners like Russia and China.
PDVSA and the government had projected an average production of 3.17 million bpd for 2009, above Ramirez's figure of 3 million.
Independent estimates, including by the US Energy Information Administration and the International Energy Agency, see production at nearer 2.2 million bpd.
Speaking to reporters after his speech, Ramirez said PDVSA was considering another bond issue after two others this year. Investors are worried by a glut of debt offer by Venezuela.
"We are considering another (bond) issue. It is something we will always coordinate with the Finance Ministry," he said, without giving more details.
"We have always said that our oil investment plan, which will require $225 billion dollars, cannot be financed with our cash flow. We would not be able to do that. No company finances its business plan with its own cash flow."
The minister also revealed that PDVSA would pay an initial $300 million within 30 days for participation in a refinery project with Brazil's Petrobras.
Petrobras and PDVSA agreed the deal last week to construct and operate the 230,000-bpd Abreu e Lima refinery in Brazil's Pernambuco state.
On natural gas, Ramirez said PDVSA would take offers at the end of the year for a 40 percent stake to develop a huge offshore project, Mariscal Sucre, in the east.
Begun in the 1980s, the project has not yet sold a molecule of gas despite reserves of 14.7 trillion cubic feet.
"Some companies have been invited -- Gazprom, Japanese firms, Eni, Statoil. They are looking at it," Ramirez said.
"The investment is about $6 billion."
A PDVSA source later said the offer period for Mariscal Sucre had been extended to November from October.
Ramirez said another offshore gas project with Russia's Gazprom had similar prospects to a recent major find with Repsol YPF. Repsol says that site has reserves of up to 7.8 trillion cubic feet of gas, which would be the largest such discovery in Venezuela.
The PDVSA source said the firm had paid ConocoPhillips between $70 million and $80 million for the company's share of the Deltana natural gas platform. | | | | Reads : 338 | | | |
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