CARACAS, May 25, 2006 (Dow Jones Commodities News via Comtex)
ConocoPhillips (COP) will begin production at its Corocoro offshore oil field in Eastern Venezuela in early 2007, said Eulogio Del Pino, a director at state run Petroleos de Venezuela S.A. (PVZ.YY).
"Corocoro will begin producing at the beginning of next year," Del Pino said. The project will eventually produce 120,000 barrels a day, he added.
"The drilling platform is there," the executive said. "We're already bringing in the drilling equipment."
Earlier this year ConocoPhillips hired a rig from Ensco International Inc. (ESV) for its drilling program at the field. The rig "has been moved to Venezuela," said Ensco spokeswoman Michelle Anderson.
Corocoro will help Venezuela offset declining production at some of its mature fields. ConocoPhillips, the operator of the field, was not immediately available to comment on the status of Corocoro.
ConocoPhillips initially planned to begin drilling in late 2004 but ran into contract and tax complications with PdVSA, one of ConocoPhillips' partners in the field.
PdVSA insisted that ConocoPhillips build a drilling platform locally to aid domestic oil service companies. Venezuela also hiked the royalty rate on the project to 16.6% from 1%, which will be lifted again to 33.3% under a new law recently passed in Congress.
PdVSA has taken steps to increase revenue from existing private oil operations in the country by hiking taxes and forcing firms to cut costs.
The field, discovered by ConocoPhillips in 1999 and declared commercial in 2002, is a key component of Venezuela's production expansion plans.
PdVSA subsidiary CVP, of which Del Pino is president, has a 35% stake in the field. ConocoPhillips' other partners include Italy's ENI Spa (E) with a 26% stake, and Taiwan's OPIC Karimun Corporation with a 6.5% stake.
PdVSA has been funneling windfall oil revenues into popular social- outreach programs and needs help from private firms to ramp up oil production, analysts have said.
Copyright (c) 2006 Dow Jones & Company, Inc.
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