National Assembly to Analyze JV Contract Model Next Week

Venezuela's national assembly is expected to begin studying a new joint venture contract model for hydrocarbons contracts between private oil companies and state oil firm PDVSA next week, energy and oil minister and PDVSA president Rafael Ramírez said in a PDVSA press release.

Private oil companies signed preliminary agreements last year to migrate all 32 existing operating agreements in the country to new joint ventures controlled by PDVSA, which will have an average 60% stake in all new joint venture contracts.

The 32 fields previously under operating agreements are now under a transition scheme controlled by special "transitional technical committees" to guarantee their normal operations and transition to the new contract model, Ramírez said.

Ramírez and Venezuela's President Hugo Chávez met on Wednesday night with the 65 government-appointed representatives in the transitional committees set up to run the joint ventures, PDVSA said.

The committees typically consist of five members, three of them appointed by PDVSA and two by the foreign or domestic oil company that previously operated each field.

Venezuelan officials have previously said they wanted to transfer the operating agreements to joint ventures controlled by PDVSA because of the "disadvantageous" economic terms they represented.

"We are putting an end to the so-called oil opening that started in the 1990s and in this case meant, through an absolutely illegal framework of operating agreements, the privatization of our oil production," Ramírez said.

The contracts now under PDVSA control represent combined production of some 532,000 barrels a day.

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