New ChevTex, Repsol YPF, PDVSA Upgrader to Need US$5bn-6bn

Investment in a heavy crude upgrade project for which US oil company ChevonTexaco (NYSE: CVX), Spain's Repsol YPF (NYSE: REP) and Venezuela's state oil firm PDVSA signed a letter of intent Thursday in Caracas will be US$5bn-6bn, a local ChevronTexaco spokesperson told BNamericas.

The project would develop a new production area, transport the extra-heavy crude through a new pipeline and upgrade it to a high-quality synthetic crude (syncrude) or refined products, ChevronTexaco said in a statement.

Resulting syncrude would be between 16 and 32 degrees API. The upgrader would be Venezuela's fifth. ChevronTexaco has a 30% stake in one of them, Hamaca. Partners have not yet decided the size of their respective stakes in the new project, the spokesperson said. In February, Venezuela's energy and oil minister Rafael Ramírez said that the ministry wants four new Orinoco upgrade projects.

France's Total and Norway's Statoil, who partner PDVSA in the Sincor upgrader, have already indicated their willingness to participate in a second project, known until now as Sincor II.

"Venezuela has long been a country of importance to ChevronTexaco and continues to play a significant role in the company's long-term strategic growth objectives," ChevronTexaco chairman and CEO Dave O'Reilly said in the statement.

"The signing of the letter of intent with Repsol YPF provides us with an opportunity to further enhance our existing portfolio in Venezuela and sets the stage for what we believe will lead to an even longer and lasting partnership."

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