Venezuela Oil Areas to Shrink

Venezuela's Oil Minister Rafael Ramirez yesterday said that drilling acreage included in the original 32 contracts for private oil companies will reduce in size by 60 percent under a proposed law.

Ramirez said the contracts cover 15,500 square miles but will be reduced to 6,000 square miles because most of the acreage has not been developed. A year ago, the state-oil company Petroleos de Venezuela SA, or PDVSA, said it would compensate oil companies for the contract changes by granting additional drilling areas.

"Although these are areas with extraordinary prospects, we believe that 14,500 kilometers is sufficient for the business plan that we have with the mixed companies," Ramirez said (AP/San Francisco Chronicle online, March 23). – LK

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