Chevron Corp. and Repsol YPF SA won bids to lead the development of two heavy crude blocks in Venezuela’ s Orinoco Belt as partners with state oil company Petroleos de Venezuela SA in the country’ s biggest oil auction. Chevron will develop the Carabobo 3 block of the Orinoco Belt along with Mitsubishi Corp., Inpex Corp. and Suelopetrol CA, Venezuelan Oil Minister Rafael Ramirez said in Caracas today. Repsol will develop the Carabobo 1 block with Oil & Natural Gas Corp., Malaysia’ s Petroliam Nasional Bhd., Indian Oil Corp. and Oil India Ltd., he said.
Venezuela is seeking to reverse declining oil output with foreign investments to convert heavy crude in the Orinoco Belt into lighter oil for export. The three Carabobo blocks are expected to produce 1.2 million barrels per day, Ramirez said. “ Foreign oil investment is absolutely necessary to develop our reserves,” President Hugo Chavez said in comments on state television. “ We can’ t do it alone.”
Repsol, ONGC, and Petronas will each have an 11 percent share in the joint venture while Indian Oil and Oil India will split a 7 percent stake in the project and PDVSA will hold 60 percent, according to an e-mailed statement from Repsol. A third oil block in the Carabobo area of the Orinoco will be assigned at a later date, Ramirez said.
The Chevron-led bid will pay the Venezuelan government a $500 million signing bonus to access the oil block and the Repsol group will pay $1.05 billion to develop the Carabobo 1 block, Ramirez said. The Carabobo area of the Orinoco is estimated to hold about 128 billion barrels of oil.
Author: Steven Bodzin, Daniel Cancel
