TotalFinaElf Wins License In Venezuela
A consortium led by TotalFinaElf won the license to develop the Yucal Placer-South natural gas area in central Venezuela with a bid of 12.5 percent premium over the 20 percent royalty rate. Other members of the group were Spain's Repsol YPF and two local companies Otepi and Inelectra, one of which will operate the block. The license was auctioned as part of 11 concession areas in central and western Venezuela being offered to private energy companies in Venezuela's first-ever natural gas licensing round.
The Yucal Placer area, comprising two blocks of about 900 sq km each, contains a total of two trillion cubic feet (tcf) of natural gas reserves and has seen 29 wells drilled in previous exploration efforts by the state oil company Petroleos de Venezuela (PDVSA).
The group has committed to develop at least 50 percent of the proven reserves of the awarded area in an eight year plan. The licenses last 35 years, renewable for another 30 years, according to Venezuela's new Gas Law passed in 1999.
Experts say that the gas in Yucal-Placer, although proven in large quantities, contains high levels of carbon dioxide contamination and is present at a high temperature, which makes development more costly.