Venezuela PdVSA to Invest $2B Into Tricolor Project

- Venezuela PdVSA to Invest $2B Into Tricolor Project

Friday, July 29, 2011
Dow Jones Newswires
CARACAS
by Kejal Vyas & Ernesto J. Tovar

Venezuelan oil giant Petroleos de Venezuela, or PdVSA, will invest $2 billion into its Tricolor Project in the Orinoco heavy oil belt this year, company officials said Thursday. The money will go toward raising output from 23,000 barrels a day to 146,000 barrels daily in the Junin, Carabobo and Ayacucho blocs by year's end, PdVSA Chief Rafael Ramirez and company Vice President Eulogio del Pino told reporters.

South America's largest oil producer is expected to invest around $18 billion this year and is counting on major advances in its Orinoco projects, where much money will be needed to convert the region's tar-like heavy oil into a usable and exportable commodity.

President Hugo Chavez relies on revenue from vast oil reserves to fund the major social programs that have supported his popularity, especially among the country's poor.

Still, Venezuela has struggled to increase output during his 12 years in office, which critics have partly attributed to insufficient investment into the sector. According to its audited 2010 annual report published earlier this week, PdVSA invested just over $13 billion into various projects last year.

The company aims to raise it's total crude production levels to 4 million barrels daily by 2015, from around 2.7 million.

In recent months, PdVSA has been on the receiving end of some good news as the International Energy Agency revised its accounting method for Venezuelan oil production, leading to an increase in the agency's estimates. Also, earlier this month the Organization of Petroleum Exporting Countries reported that Venezuela's proven crude-oil reserves surpassed those of Saudi Arabia in 2010, making the South American country the holder of the world's largest oil reserves.

Still, questions remain over how and when the country will be able to secure the nearly $80 billion it expects to need for developing the Orinoco projects.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Eni Picks Up Tab for PDVSA's Junin 5 Development

- Eni Picks Up Tab for PDVSA's Junin 5 Development

Friday, July 15, 2011
Eni S.p.A.

The Minister of Energy and Petroleum of Venezuela and President of PDVSA, Rafael Ramírez and Eni's CEO Paolo Scaroni, met yesterday in Caracas to discuss the significant joint projects between PDVSA and Eni in Venezuela.

In particular, the primary topic of discussion was the development of the Junín 5 heavy oil block, located in the Faja of Orinoco, which holds 35 billion barrels of certified oil in place and is operated by two mixed enterprises (PetroJun í n for the upstream and PetroBicentenario for the downstream) owned 60% PDVSA, 40% Eni.

The development plan calls for an early production phase of 75,000 barrels of oil per day starting in late 2013, and a full phase of 240,000 barrels of oil per day in 2018, along with the construction of a new refinery on the coast, in Jose.

In yesterday's meeting PDVSA and Eni also discussed options to anticipate the early production start up in late 2012 using synergies with existing PDVSA facilities to transport an initial gross production of 7 to 10 kbopd. PetroJun í n expects to award the main engineering contracts for the EP phase (processing facilities and pipelines) and the drilling contracts in 3Q 2011. It is anticipated that approximately 10 wells will be drilled this year. In addition, by year end the award of the engineering contract for the downstream (refinery) is also planned.

Eni agreed to finance PDVSA's share of development costs for Junín 5's early production phase up to a total of $1.5 billion USD.
As a social project to help the country, Eni will dedicate a tranche of the Junín 5 bonus and make additional financing to PDVSA for a combined total of $500 million USD, dedicated to fund a power station to be built in the Güiria peninsula.

In Venezuela, Eni is co-operator with a 50% stake, in the Cardon IV Operating Company which manages the offshore block where the super-giant Perla gas field is located. Perla has over 16 Tcf of estimated gas in place (2.9 billion barrels of oil equivalent). Cardon IV completed the FEED for the early production phase (300 MMscf/d) and is discussing a gas sales agreement with PDVSA.

Eni is also present in Venezuela through its participation in Petrosucre (PDVSA 74%, Eni 26%), the company which operates the Corocoro oil field.

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Petrovietnam, PDVSA Sign Oil Extraction Deal

Petrovietnam, PDVSA Sign Oil Extraction Deal

Monday, April 18, 2011

Asia Pulse Pte. Ltd.

Vietnam National Oil and Gas Group (PetroVietnam) and Venezuela National Oil Petroleum Company (PDVSA) have reached an agreement on measures to extract the first oil flow from Block Junin 2 in Venezuela in the fourth quarter of 2012.

The two sides agreed on tasks and funding for their joint venture Petromacareo in 2011-2012 to enable it conduct the assessment, development and installation of equipment, building of pipelines, and implementation of oil services for the Junin 2 project. With a very large investment capital and scale, the Junin 2 project is seen as a motive force for the development of oil projects between Vietnam and Venezuela.

The oil output pumped from Block Junin 2 is expected to reach 10 million tonnes by 2016.

Apart from Junin 2, PetroVietnam and PDVSA are cooperating in several other projects, including a master study project for Maracaibo lake and an expansion and upgrade project for Dung Quat Oil Refinery.

During his working visit to Venezuela, PetroVietnam's Chairman Dinh La Thang has gained Venezuelan Vice President cum Minister of Energy and Petroleum Rafael Ramirez Carreno's commitments to simplifying administrative procedures and required processes while giving top priority to PetroVietnam's service companies to engage in providing services related to the Junin 2 field project, said PetroVietnam.

Venezuela said it was ready to provide strategic reserves of crude oil and oil products for Vietnam in the long term.