PDVSA Details US$26bn Investment Plans

Venezuela's state oil company PDVSA plans to invest US$26bn in oil and gas exploration and production as part of its 2004-2009 business plan, company VP Félix Rodríguez said in a statement.

The company's total business plan calls for US$37bn investment through 2009. According to previous PDVSA information, PDVSA will put up US$27bn of the investment, with third parties providing the remaining US$10bn.

Despite continued political uncertainty in Caracas, where President Hugo Chávez faces renewed calls for a recall referendum, PDVSA says its business plan is on track.

CRUDE OIL PDVSA

produced 3.08 million barrels (mb) of oil on Friday (May 28), company president Alí Rodríguez Araque said at a press conference in Maracaibo. High international oil prices have benefited Venezuela's economy - its domestic crude price closed at US$33.52 a barrel on Friday - representing "a significant income for the country above what was estimated," he said.

PDVSA's production goal by 2009 is 5mb/d, with new production coming from the Tacata, Chaguaramal, El Furrial and Tomoporo fields. Production in the company's western division is programmed for 2mb/d by 2009, with the other 3mb/d coming from the eastern division.

To achieve that growth, 3,800 wells are expected to be drilled in the eastern, western and southern regions of the country, where the main crude reservoirs and major exploration areas are located, Félix Rodríguez said.

It is also estimated that an average of 111 rigs per year will be kept in operation. In addition, more than 5,500 wells will be worked over and repaired.

The strategic guidelines defined for the exploration business also identify the need to establish new exploration blocks near the main fields already defined by PDVSA.

Therefore, studies on the Tomoporo and Franquera areas in the west of the country, as well as on El Tejero and Cotoperí in the east, are due to begin immediately, Félix Rodríguez said. A seismic exploration campaign will also be carried out in central Venezuela.

PDVSA has started drilling the first of four wells planned on the Tomoporo field in 2004, Alí Rodríguez said.

Future crude oil production from this field is expected to average about 250,000 barrels a day. Blocks already producing oil, including reservoirs under development and mature fields, will be given a boost by enhanced recovery projects through the use of high-pressure water and gas injection, Félix Rodríguez said.

Such recovery projects are planned for El Furrial, El Carito and El Tejero, in the eastern region. In the western region, a pressure maintenance program will be developed to maintain production levels, mainly at PDVSA's fields located on Lake Maracaibo's east coast in Zulia state.

Félix Rodríguez also announced that PDVSA would increase heavy crude production in the Orinoco Belt.

NATURAL GAS

In the next seven years, "Venezuela is due to become a world power in the gas business. We will be facing great challenges ahead," Félix Rodríguez said.

Studies carried out on the Deltana shelf off the Delta Amacuro coast and Mariscal Sucre in Paria have led to the conclusion that, from 2007, Venezuela will have enough supply of natural gas to cover domestic demand. "This is a great starting point," Félix Rodríguez said.

In addition, PDVSA is waiting for the government to approve exploration in the Gulf of Venezuela and Falcón state's northern coastline. "I can tell you now that [PDVSA's 2004-2009 business plan] could be a shared effort together with private capital. We have charted a course, we have a strategy, we have growth with proven reserves, we have the certainty that our business plan is totally realistic, and to top it off, we can add to the foregoing the huge reserves lying in the Orinoco belt," Félix Rodríguez said.

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