Gazprom, Chevron Win Rafael Urdaneta Licenses in Venezuela

Venezuela's energy and oil ministry has awarded two licenses to Russian oil company Gazprom and one to US-based Chevron (NYSE: CVX) to explore for gas off the coast of western Venezuela in the first stage of the Rafael Urdaneta project.

Gazprom bid US$15.2mn for Urumaco I and US$24.8mn for the adjacent Urumaco II block, while Chevron bid US$5.6mn for the Cardon III block.

The contracts will be officially signed in the presence of President Hugo Chávez on September 27.

The total estimated investment in the first four years of Rafael Urdaneta's first stage is US$98mn, the ministry said in a statement.

"We are sure that these [natural gas] resources have an extraordinary energy appeal," said Rafael Ramírez, president of state oil firm PDVSA and energy and oil minister, during an event to announce the tender winners in Caracas.

Ramírez also welcomed Gazprom to Venezuela as "the leading provider of natural gas volumes from Russia to Europe." Chevron already has extensive operations both in offshore natural gas exploration and onshore crude production in Venezuela.

Overall Venezuela made US$52.8mn from this first phase of Rafael Urdaneta, including US$45.6mn from the cash awards for the three blocks awarded to Gazprom and Chevron. The rest came from the 29 companies that paid US$250,000 each for a data pack with information about the blocks.

A total of six blocks were offered in this first stage of Rafael Urdaneta, but the tender for the Urumaco III block was declared void because the bids received were "insufficient" and the other two blocks, Moruy III and La Vela Sur, received no offers at all, Ramírez said.

The Rafael Urdaneta project consists of 29 blocks in the Gulf of Venezuela off northern Falcón state with total gas deposits estimated at 26 trillion cubic feet. Venezuela plans to tender the blocks in different stages.


The ministry has launched a second tender for five more blocks: Urumaco III (declared void in the first tender), Moruy II, Castillete Noreste II, Cardon II and Cardon IV, Ramírez said.

Letters of invitation to bid will be sent to companies September 12-14 and bids will be received November 9.

Companies that bought bidding rules for the first stage can bid on the second stage without paying for new rules, Ramírez said.

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