Oil Firms Still Await Venezuela Natural Gas Bidding Round

Major oil firms are still waiting for the Venezuelan government to finalize terms of a natural gas bidding round off the western coast of the country, industry sources said Thursday.

The oil ministry had hoped to offer seven natural gas development blocks in and near the Gulf of Venezuela this month, but it is still finalizing the terms of the bidding round.

"The Gulf of Venezuela is something we are interested in," said a source at Norway's Statoil (STO). "If we are allowed to participate, we will."

He didn't know when the oil ministry plans to announce details of the bidding round. The ministry wasn't available for comment.

The ministry has delayed the bidding round a number of times, but with Venezuela's 148 trillion cubic feet of natural gas reserves open for private investment, interested companies are willing to wait.

"We systematically look at opportunities that arise in Venezuela, and will continue to do so," said a spokesman at French oil company Total (TOT), when asked if the company planned to participate. "Basically, we are always interested in opportunities in Venezuela."

In Venezuela, Total has stakes in the Jusepin oil field, the Yucal Placer natural gas field, and the Sincor heavy crude upgrading project.

State-controlled oil company Petroleos de Venezuela (PVZ.YY), or PdVSA, plans to invest $9.5 billion to raise the country's natural gas output to 11 billion cubic feet per day by 2009 from 6.3 billion cubic feet at present.

The company needs to get the natural gas out of the ground. PdVSA currently has a deficit of natural gas and plans to import gas from Colombia until it ramps up domestic output.

PdVSA injects natural gas into oil wells to maintain pressure in the reservoirs, and also uses natural gas in the petrochemicals industry. PdVSA hopes to begin exporting natural gas in 2009.

Analysts say private oil companies will be more willing to invest in Venezuela now that a presidential referendum is out of the way. President Hugo Chavez survived an Aug. 15 recall vote, leaving him in office until 2007. He can also run for re-election in the 2006 campaign.

"Things are calm... now its back to business," said the Statoil source.