Shell Eyes Orinoco Belt Crude Upgrader, NatGas E&P Licenses

Anglo-Dutch oil major Shell is discussing with the Venezuelan government the possibility of developing a project to upgrade extra-heavy crude from the Orinoco oil belt, Shell Venezuela president Sean Rooney told BNamericas.

"We are talking with the government about carrying out a project in the belt, bringing out the technology from the US and Canada," Rooney said.

The executive admitted, however, that the talks are proceeding slowly as Shell is focused on migrating its operating agreement on the Urdaneta Oeste field in western Venezuela to a joint venture controlled by state oil firm PDVSA.

"Once we finish that we can move faster on the project in the belt," he added.

Shell has said little publicly about the conditions of its new JV for Urdaneta Oeste but Rooney said production will be maintained at about 50,000 barrels a day during the transition period.

A PDVSA lawyer told BNamericas earlier this year that companies that agree to migrate to the new JVs would be awarded additional oil and gas contracts in nearby fields.

Rooney said that Shell would be interested in new E&P licenses in eastern Venezuela and pointed to the fact that new developments in the Orinoco oil belt would require massive amounts of natural gas to lift the extra heavy crude, known as bitumen, into the upgrader.

If new licenses become available "we are interested in participating," Rooney said. "We will take part, yes, absolutely."

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.

Click here for a Free two week trial to our Latin America Oil & Gas information service.