CARACAS - Venezuelan state oil company Petroleos de Venezuela, or PdVSA, Monday night signed accords with two other state companies intended to help speed up development of the country's Orinoco heavy oil belt and increase the country's oil production, Venezuelan President Hugo Chavez said in a televised address.
PdVSA plans to transfer a 10% stake in heavy oil upgrader Petropiar to state mining firm Corporacion Venezolana de Guayana, or CVG, and form a new oil company named Petro San Felix, Mr. Chavez said, without explaining how it would boost oil production.
The move will reduce PdVSA's stake in Petropiar, which produces 150,000 barrels a day of crude oil, to 60%. U.S. oil major Chevron Corp. owns 30%.
Mr. Chavez, who faces a tough battle for re-election in October, has pledged to increase Venezuela's oil production to 3.5 million barrels a day by the end of the year from 3 million at the start of the year.
Critics have noted that PdVSA has repeatedly failed to meet the lofty output goals laid out by Mr. Chavez during his 13-year presidency because the company has diverted revenue to government social programs instead of investing in production projects.
In February, Mr. Chavez and officials from China's Citic Group appeared on Venezuelan state television to sign agreements that involved, among other things, the Chinese company's "participation" in Petropiar. Venezuelan officials later said they planned to sell a 10% stake in Petropiar to Citic, but Mr. Chavez made no mention of that Monday.
ConocoPhillips held a stake in Petropiar until its stake was nationalized in 2007.
Mr. Chavez said PdVSA also had signed a steel-supply agreement with state steel producer Siderurgica del Orinoco, or Sidor, and the steel would be used to develop the Orinico project.
PdVSA needs around 1.2 million tons of steel in each of the next five years to develop Orinoco, at a total cost of around $3.6 billion, he said.
"I'm confident that the [Sidor] workers will be able to meet this goal," he said.
Mr. Chavez said PdVSA will pay $1 billion to Sidor in advance to help the steel company boost production.
Copyright (c) 2012 Dow Jones & Company, Inc.
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