National Assembly to Analyze JV Contract Model Week of Feb 20-24

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 during the week February 20-24, energy and oil minister and PDVSA president Rafael Ramirez told reporters.

Ramirez had said the assembly could begin studying the model in January but PDVSA has delayed submitted the model while it works out the details.

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 operating agreements run by 22 companies will be reduced to 19 JVs controlled by PDVSA, the minister said.

The minister added that in the case of the Boscan field, operated by US oil major Chevron (NYSE: CVX), the government has decided that about 10,000 barrels a day (b/d) of current production of 100,000b/d will be used in Venezuela to manufacture asphalt as part of a nationwide paving plan instead of being mixed with other crude for export.

"We need to obtain sovereignty over our production," Ramirez said, adding the 10,000b/d are to be sold at a subsidized price of US$12/b "covering only production costs."

The 32 fields previously under operating agreements are now under a transition scheme controlled by special transitional technical committees to guarantee normal operations and transition to the new contract model. The contracts now under PDVSA control represent combined production of some 532,000b/d.

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