PDVSA expects to increase total oil production on the new JVs to 430,000 barrels a day (b/d) by year-end up from 372,000b/d currently, PDVSA subsidiary CVP president Eulogio Del Pino told BNamericas on Monday.
The 22 JVs will handle production in 25 fields with reserves of 5 billion barrels (Bb) or, more than 6% of Venezuela's total proven reserves of about 70Bb.
In announcing the JVs at a press conference, energy and oil minister and PDVSA president Rafael Ramirez said the new arrangement lends transparency to the operations in the fields.
"We have a law that is very clear, mechanisms that are very clear," he said. "And whoever doesn't adjust to these, we will take over their fields."
PDVSA has absorbed some 115,000b/d in production from seven fields that reverted to the state firm's control because the private operators refused to sign new JVs.
French firm Total (NYSE: TOT) and Italy's Eni (NYSE: ENI) refused to sign JVs with PDVSA for their Jusepin and Dacion fields respectively because they disagreed with the terms, leading PDVSA to seize operations of the fields.
"It was not possible to reach an agreement, those companies refuse to adjust themselves to our law," Ramirez said.
US oil major ExxonMobil (NYSE:XOM) and Norway's Statoil (NYSE: STO) sold minority shares in two separate fields rather than enter into agreements with PDVSA.
However, out of the 19 companies that were involved in operating agreements, 16 accepted partnering PDVSA in the new JVs.
It was all done in less than a year but was a victory that came at a price for Venezuela, which was forced to confront some big names in the energy business. Eni has already said it would explore legal options, while Total has denounced the occupation of the field it operated for a decade.
PDVSA now controls almost every barrel of oil produced in Venezuela, but the atmosphere was not a festive one in La Campina, the Caracas headquarters of PDVSA. Energy and oil ministry Ramirez himself summed it up when he told BNamericas: "You were the only one to congratulate us today, thank you."
PDVSA will have a share larger than 60% in only four JVs which are: Guarico Occidental, a partnership with Japanese firm Teikoku, where PDVSA's stake will be 70%; LL652, one of the two partnerships with US oil major Chevron (NYSE: CHX), where PDVSA will have 75%; B2X 70/80, a partnership with British-French firm Hocol, where PDVSA will hold 80%; and a 75% stake in a partnership with China's CNPC to operate the Caracoles and Intercampo fields under a single JV.
PDVSA will have 60% in the following fields: Kaki with local firm Inemaka; Cabimas with fellow Venezuelan company Suelopetrol; Onado with Argentina's CGC; Mene Grande and Quiriquire with Spain's Repsol (NYSE: REP); Boscan with Chevron; Falcon Este and Falcon Oeste under a single JV with Vinccler, the Venezuelan unit of Canada's PetroFalcon (TSX: PFC); Casma Anaco with Venezuelan firm Open; Colón with Argentina's Tecpetrol; Campo Urdaneta with Anglo-Dutch major Shell (NYSE: RDS-B); Pedernales and Ambrosio with UK-French firm Perenco; Monagas Sur with US-based Harvest Natural Resources (NYSE: HNR); Boqueron and DZO with UK oil firm BP (NYSE:BP); and four separate joint ventures with Brazil's federal energy firm Petrobras (NYSE: PBR), Acema, La Concepcon, Mata and Oritupano-Leona. PDVSA has taken over operations in seven fields previously handled by private firms: B2X 68/79 (Hocol); Maulpa (Inemaka); Sambi-Guere (Teikoku); Guarico Occidental (Repsol YPF); Quaimare-La Ceiba (Repsol YPF), Dación (Eni) and Jusepin (Total).
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