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Chevron May Start Output at Venezuela’s Carabobo in 2012

Chevron Corp. (CVX) and its partners on the Carabobo 3 block in Venezuela’s Orinoco heavy oil belt, including state oil company Petroleos de Venezuela SA, may be able to start early production in the third quarter of 2012.

Chevron, which has a 34 percent stake in the block, is holding talks with joint venture partners and expects to make a decision on how to develop the project in the next “couple of months,” Ali Moshiri, Chevron President for Africa and Latin America, said in an interview in Puerto La Cruz, Venezuela.

“We are in the phase of deciding which path we want to take, whether that’s full development or early production,” said Moshiri. “The financing will be the second phase. It depends on the size of the project that we want to move ahead.”

Chevron produced 58,000 barrels of oil a day in Venezuela in 2010 and was selected last year to participate in a group to develop the Carabobo 3 project, according to an annual report filed with U.S. regulators. Venezuela’s Oil Minister Rafael Ramirez said today in at a conference in Puerto La Cruz that the South American country was asking its joint venture partners to speed up plans for early production in the Orinoco and wouldn’t accept any delays.

“First production could be as early as the third quarter of 2012, but early production will be a collective decision,” said Moshiri. PDVSA, as the Caracas-based company is called, has 60 percent of the Carabobo 3 project.

Moshiri, addressing a dinner at an oil conference, said that the future of Venezuela’s oil industry depended on developing heavy crude oil and that the industry needed prices of at least $60 to $80 a barrel to develop heavy crude.

Venezuela has the capacity to set any production target that it wants,” said Moshiri. “You have to find a way to finance it, because heavy oil requires tremendous investment.”

-- With assistance from Corina Rodriguez Pons in Puerto La Cruz, Venezuela. Editors: Keith Gosman, Indranil Ghosh

To contact the reporters on this story: Nathan Crooks in Puerto La Cruz at ncrooks@bloomberg.net.

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.

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