Govt, ConocoPhillips to Discuss Corocoro Dispute

Venezuela's government plans to hold talks with US oil company ConocoPhillips (NYSE: COP) and Italian oil and gas company Eni regarding a contract dispute on eastern Venezuela's Corocoro field, Associated Press quoted Venezuela's oil minister Rafael Ramírez as saying.

"I understand that, in particular, ConocoPhillips has sought a conversation with us, we will develop this, and with Eni as well," Ramírez said Thursday.

A ConocoPhillips spokesperson in Caracas confirmed to BNamericas that the company had contacted state oil firm PDVSA's legal department Thursday to begin talks.

ConocoPhillips planned to start drilling 14 wells in the Corocoro oil field last December, but President Hugo Chávez's government put the plan on hold due to a dispute over the company's business plan.

"The business plan presented by ConocoPhillips differs by more than US$200mn from its original estimate," Reuters quoted Ramírez as saying January 11. ConocoPhillips is reportedly disappointed at the size of the field, located in the Gulf of Paria West area, and is looking for ways to downscale investment. The drilling delays could mean fines and other penalties for the company, an official from state oil firm PDVSA's legal department told BNamericas.

However, "We are talking, it's not yet something conflictive," the ConocoPhillips spokesperson said.

President Hugo Chávez appointed a new board of directors for PDVSA Thursday, and the spokesperson said that the new directors should discuss the Corocoro situation at their first board meeting, which has not been scheduled yet.

"ConocoPhillips remains committed to moving forward with Corocoro," AP quoted a ConocoPhillips spokesperson as saying.

The Corocoro field - discovered by ConocoPhillips in 1999 and declared open for commercial use in 2002 - is a key component of Venezuela's production expansion plans and was expected to begin production in the second half of 2006.

Last year, Venezuela's deputy oil Minister Luis Vierma said the drilling was put on hold because ConocoPhillips planned to import supplies for the project instead of buying locally-produced parts and machinery.

ConocoPhillips has a 32.5% operating interest in the field. Its partners are Eni (26%), the Overseas Petroleum and Investment Corporation (Opic) subsidiary of the Taiwanese China Petroleum Company (CPC), which has 6.5%, and PDVSA's CVP subsidiary with a 35% stake.

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