Venezuela Oil Auction Still on Amid Devaluation - Official

Orinoco Belt Regions
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CARACAS (Dow Jones), Jan. 11, 2010

Venezuela's plan to hold a drilling auction for several blocks of heavy and extra-heavy crude in the Orinoco region remains in place despite the government's Friday night announcement that it devalued the currency, an official said.

"The auction is moving forward, it's still on," an official at state-run petroleum company Petroleos de Venezuela, who asked not to be named, said Monday.

The official would not confirm whether the planned timetable for holding the so-called Carabobo auction would remain the same, or may be pushed back. The auction was planned for later this month or early in February.

More details could be available later in the day, the official said.

Venezuela on Friday night devalued its currency by half, setting a new fixed rate of 4.3 bolivars for $1, from the previous VEF2.15 for $1. It also set up a secondary official rate of VEF2.6 for $1, which would be used for authorized purchases of imports of essentials such as basic foods and medicine.

Among the companies that have shown interest in presenting a bid in the Carabobo oil auction are U.S.-based Chevron Corp., the UK's BP PLC, France's Total S.A., Norway's Statoil ASA and Chinese state oil firm CNPC.

The auction is considered the most important drilling project in oil-rich Venezuela in more than a decade and the blocks up for bidding could produce a total of 1.2 million barrels a day.

Copyright (c) 2010 Dow Jones & Company, Inc.

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