La Ceiba JV, Govt Negotiating Fate of 500,000b

Agencia Operadora La Ceiba (AOLC), which operates the La Ceiba oilfield in Venezuela, is negotiating the fate of 500,000 barrels of crude with the government, BNamericas has learned.

State oil company PDVSA earlier this year told AOLC, a joint venture between US oil major ExxonMobil (NYSE: XOM) and Petro-Canada (TSX: PCA), to stop production.

At that time AOLC was churning out some 6,000 barrels a day (b/d) and the 500,000b produced this year were stockpiled in PDVSA's Puerto Miranda storage tank yard.

"AOLC is awaiting instructions from energy and oil ministry (MEP) to restart operations," AOLC press officials said in an email. "AOLC is working with CVP [the PDVSA unit that administers deals with local and foreign partners] on details to permit lifting of the 500,000b produced earlier this year from La Ceiba field."

In 2004, the government passed the hydrocarbons law which gives PDVSA at least 51% in any E&P crude venture, new or ongoing. However, PDVSA does not yet have a stake in La Ceiba, which the two multinationals started operating in the 1990s.

Energy and oil minister and PDVSA president Rafael Ramirez says his office wants the state company to hold a controlling stake in La Ceiba.

ExxonMobil's only ongoing project in Venezuela now is a 41.7% share in Cerro Negro, a JV to produce and upgrade Orinoco extra-heavy crude with PDVSA, which holds 41.7%, and the UK's BP (NYSE: BP), which holds the remainder. Other ExxonMobil projects in the country have faced government opposition, fallen through or been sold.

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