Statoil and MENPET Ink Deal for Migration of Sincor

Statoil, as a partner in Sincor, has agreed with the Venezuelan Government on the main terms and conditions for its participation in the New Mixed Company to be created from Sincor.

"Negotiations have been tough as expected, but have been conducted in a professional and fair manner with satisfactory results for both parties", said Thore E. Kristiansen, president of Statoil Venezuela.

This agreement is the second of a three phase process for the migration of Sincor. There are still important issues that are being worked with the Government and PdVSA before submitting the document for the National Assembly for final approval.

In the Memorandum of Understanding signed Statoil has agreed with the Venezuelan authorities compensation terms and governance conditions that make it possible for Statoil to continue as a partner on this successful Extra Heavy Oil Project. Statoil interest in the new project will be about 10%. The compensation has been based on negotiations of the project's future value and Statoil is satisfied with the outcome of these negotiations.

Sincor produces approximately 200,000 barrels of Extra Heavy Crude Oil per day which are upgraded to a light (32 degree API) low sulphur synthetic crude of that has achieved very good acceptance in the international markets.

The construction of Sincor was completed in 38 months at a cost of US $4.2 billion. This project covers the whole value chain from production of heavy crude onshore in the Junin block in the Orinoco Belt, transportation, upgrading and international marketing of the synthetic crude. Statoil has been present in Venezuela since 1995 and believes the country offers attractive opportunities for joint projects with PDVSA and for the sustainable development of its hydrocarbon resources


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