Cerro Negro Company News

Two of the Orinoco extra-heavy crude oil projects Venezuela's government aims to nationalize are resisting the move, energy and oil minister Rafael Ramirez said.

Venezuela's government has instructed the four Orinoco crude oil projects to reduce synthetic crude exports by 3.3 million barrels a month, or 110,000b/d.

Fitch Ratings has released a special report, titled 'Venezuela's Heavy Oil Projects: The Beginning of the End?' that details the rationale behind Fitch's May 11, 2006 decision to downgrade the senior secured debts of partnerships for the projects.

The CVP affiliate of PDVSA that oversees contracts with domestic and foreign oil companies has reiterated its plan to increase its present stake in four Orinoco extra-heavy crude projects to 60% and then seek to double production.

Moody's has downgraded its ratings to B1 from Ba3 for the secured long-term debt issued by four heavy oil projects in Venezuela. The rating outlook is stable.

Credit ratings agency Fitch has cut the ratings of all four partnerships between Venezuela's state oil firm PDVSA and oil firms that together produce some 600,000 barrels a day (b/d) of synthetic crude.