Venezuela Natural Gas Bidding Round To Start In 2004

Before the end of this year Venezuela will launch a bidding round for natural gas and oil exploration in the Gulf of Venezuela, Oil Minister Rafael Ramirez said Monday.

He said the oil ministry is still defining the size of each block open for development, and the total number of blocks will exceed seven.

"We are adjusting exactly what the size will be of the areas we are offering," the minister said Monday, speaking to reporters following an event at the Foreign Ministry.

Foreign and local oil firms are waiting for the Venezuelan government to finalize the terms of a natural gas bidding round off the western coast of the country, and the bidding process has been delayed repeatedly this year. Venezuela has 148 trillion cubic feet of natural gas reserves.

Ramirez said the development blocks wouldn't stretch into a disputed maritime border with Colombia. The two countries have disputed the maritime border in the Gulf of Venezuela for the past 40 years.

"We are sure that there will be no problems with the Colombian side," Ramirez said, adding that Venezuelan officials have discussed the bidding round with Colombian President Alvaro Uribe.

State oil giant 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, up from 6.3 billion cubic feet at present.

The company needs to get the natural gas out of the ground. Despite large reserves, 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.