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PDVSA, Chevron, Repsol Sign $30 Billion Oil Ventures

May 12 (Bloomberg) -- Petroleos de Venezuela SA, the state-owned oil company, signed final contracts worth at least $30 billion to develop crude reserves in the Carabobo blocks of the Orinoco Belt with groups led by Chevron Corp. and Repsol YPF SA.

PDVSA, as the company based in Caracas is known, will hold a 60 percent stake in the joint ventures and oversee the production of as many as 880,000 barrels of oil a day in the two blocks, Rafael Ramirez, Venezuela’s oil minister, said today in comments on state television. The partners also plan to construct upgraders that convert heavy tar-like crude into lighter oil for export, said Ramirez, also president of PDVSA.

“These are important and elevated levels of investment and will help Venezuela improve its competitiveness in the world,” he said. “This ratifies the international recognition of our oil policy.”

The Carabobo projects, along with similar ventures with Eni SpA, China National Petroleum Corp. and a group of Russian companies in the neighboring Junin field, are central to Venezuela’s plans to boost waning oil output by 2.9 million barrels a day by 2017. The foreign companies get the opportunity to stake a claim in one of the world’s biggest oil deposits.

Ramirez said that Venezuela’s oil production will rise to 4.15 million barrels a day in 2015 and to 6.85 million barrels a day in 2021.

Chevron, Mitsubishi Corp., Inpex Corp. and Suelopetrol CA will take a combined 40 percent stake in the Carabobo 3 area. Output is scheduled to start in 2013 and increase to 400,000 barrels a day in 2016.

Signing Bonuses

The companies are required to pay a signing bonus of $500 million to access the reserves and provide a $1 billion loan to PDVSA to begin operations, according to terms published in the Official Gazette on May 7.

Repsol Chief Executive Officer Antonio Brufau and Chevron’s head of production and exploration for Africa and Latin America, Ali Moshiri, attended the signing ceremony.

Repsol, Oil & Natural Gas Corp., Petroliam Nasional Bhd., Indian Oil Corp. and Oil India Ltd. will develop the second project called Carabobo 1 with PDVSA to pump up to 480,000 barrels a day. They’re required to pay a $1.05 billion signing bonus and provide the country with a $1.05 billion loan to begin the development, according to the Official Gazette.

Financing for the blocks will be covered 30 percent through international loans, 40 percent from the minority partners and the remaining 30 percent from initial production, PDVSA Vice President Eulogio Del Pino told reporters today in Caracas.

Numerous Delays

The awarding ended a selection process that began in 2008 and faced repeated delays. Of the 52 companies that Venezuela invited to bid, 19 paid for field data.

PDVSA will begin production of about 300,000 barrels a day by 2013 at the six Orinoco Belt oil fields being developed with joint venture partners in eastern Venezuela, Del Pino said.

“The companies will have to invest in upgraders, a production center and in oil pipelines, but that infrastructure won’t be ready until 2016,” he said. “The heavy crude may be refined in the Caribbean, or Dominican Republic or Curacao, until the upgraders are finished instead of blending with lighter oil here in Venezuela.”

To contact the reporter on this story: Daniel Cancel in Caracas at

To contact the editor responsible for this story: Dale Crofts at

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