Repsol YPF, Teikoku to Get Natgas E&P Licenses in New JVs

Venezuela will award Japanese major Teikoku and Spain's Repsol YPF (NYSE:REP) natural gas exploration licenses after they signed joint ventures with state oil firm PDVSA, energy and oil minister and PDVSA president Rafael Ramirez told reporters.

"We have estimated two licenses there, one in the Teikoku property and one in the Repsol YPF property," Ramirez said after a press conference to announce the 22 new joint ventures signed between PDVSA and private oil firms to operate 25 oil fields.

Repsol YPF has 40% in a partnership with PDVSA on the Mene Grande and Quiriquire fields, where gas production is a combined 300 million cubic feet a day (Mf3/d), according to Ramirez, while Teikoku has 30% in the Guarico Oriental field, with production estimated at 100Mf3/d-120Mf3/d.

Repsol YPF's Termobarrancas operation in Barinas state, central Venezuela, is already generating 80MW using gas from the nearby Barrancas field, where the Spanish energy major is engaged in gas and crude E&P.

As part of the government's reform of the upstream sector, PDVSA is taking over the operation of some smaller fields and rewarding those companies that relinquish their fields voluntarily with gas licenses.

Teikoku gave up its Sanvi Guere and Guarico Occidental fields and Repsol YPF its Quaimare-La Ceiba field, all of which PDVSA will now operate.

Speedy access to new gas licenses was the main carrot PDVSA dangled in front of oil companies to get them to forsake their operator status and enter into PDVSA-dominated JVs last year.

Venezuela wants to reduce venting and flaring of natural gas and maximize the use of its vast reserves of that gaseous hydrocarbon. Powering a 300MW thermoelectric generation plant, even a new efficient one such as Pedro Camejo, which is custom-fitted with two Siemens engines, requires some 80Mf3/d of natural gas.

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