Venezuela lawmaker says gas likely to be nationalised this year
|
| Published on Saturday, July 7, 2007 |
Email To Friend Print Version |
By Steven Bodzin and Jose Enrique Arrioja
CARACAS, Venezuela (Bloomberg): Venezuela, holder of Latin America's biggest natural gas reserves, is likely to nationalise gas production by the end of the year, continuing an effort that has already reached oil companies and utilities, a lawmaker said.
"We are in a process of reforming the law regulating the gas industry" to give the state majority project ownership, Angel Rodriguez, president of the energy and mines committee in the Venezuelan legislature, said in an interview. "By the end of the year we will be consolidating the full sovereignty of the petroleum industry."
The revised natural-gas law may reduce project ownership by France's Total SA, Repsol YPF SA of Spain and Japan's Inpex Holdings Inc. Total spokeswoman Patricia Marie said in an e-mail that she had no comment. Repsol's Martin Fresco wasn't available to respond.
Total was one of four oil companies that agreed earlier this year to Venezuelan government demands to yield a majority stake in ventures that pump heavy oil in the Faja region. Two US producers, Exxon Mobil Corp. and ConocoPhillips, opted to exit Venezuela when faced with having state-run Petroleos de Venezuela take control of their heavy-oil operations. Compensation for those investments is still being negotiated.
The government of President Hugo Chavez has forced oil producers to rewrite production agreements for oil fields not in the Faja region, giving control to Petroleos de Venezuela. He also bought out AES Corp. of Arlington, Virginia, and New York-based Verizon Communications Inc. to take control of the power and phone companies.
Gas nationalisation has been anticipated since early 2006, Milko Luis Gonzalez, a professor of energy policy at Venezuela Central University, said yesterday in a telephone interview.
Under today's laws, private companies can own projects extracting gas that isn't associated with oil production.
Repsol has a 60 percent interest in a joint venture with Petroleos de Venezuela to produce gas in the Quiriquire Profundo field. The project has the potential to produce 280 million cubic feet a day, Petroleos said on its website.
Total planned to spend $600 million through 2035 on its Yucal Placer gas project in Venezuela to extract as much as 143 billion cubic feet of natural gas, the company said in a 2003 presentation.
Venezuela has about 150 trillion cubic feet of gas reserves, about 10 percent of which isn't associated with oil, according to the US Department of Energy. Gas that is tapped together with oil reserves is covered by separate rules that only allow foreign partners to take minority stakes.
Inpex, Japan's largest energy explorer, owns 70 percent of the Copa Macoya field. Petroleos owns the remaining 30 percent.
Spokesman Yutaka Inoue didn't reply to an e-mail and phone call. |
|
