Border Dispute Behind Withdrawal of Vinccler License

A border dispute between Colombia and Venezuela could have motivated the withdrawal by Venezuela's energy and oil ministry of an offshore natural gas exploration license awarded to Vinccler Oil & Gas, the Venezuelan unit of Canada's PetroFalcon (TSX: PFC), newspaper El Universal reported.

The article states that energy and oil minister Rafael Ramirez confirmed to El Universal the ministry received a complaint from Colombia which would have meant redrawing the limits of the Castilletes Noreste II block awarded on November 15, 2005, to Vinccler as part of the Rafael Urdaneta phase B tender.

The article goes on to denounce Ramirez's decision to withdraw the license.

Anibal Martinez, president of Venezuelan oil think tank Frente Pro Defensa del Petroleo, was quoted as saying that "Venezuelan sovereignty in the Gulf [of Venezuela near Colombian waters] is not debatable" and called for the ministry to continue exploration and production in the area.

Licenses for another two blocks awarded in November - one to a partnership of Brazil's federal energy company Petrobras (NYSE: PBR) and Japan's Teikoku and the other to Spain's Repsol YPF (NYSE: REP) and Italy's Eni (NYSE: E) - were both signed on January 27 without problem, the paper reported. Both blocks are closer to Venezuelan shores and farther away from the contested Gulf of Venezuela area than Vinccler's.

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