Shell, PDVSA to Invest US$70mn in Urdaneta JV

Anglo-Dutch oil firm Shell and Venezuela's state oil firm PDVSA will invest some US$70mn in the Urdaneta oilfield to drill new wells and increase production to 60,000 barrels a day (b/d) from the current 45,000b/d, Shell Venezuela president Sean Rooney told BNamericas.

Rooney said his company would drill new wells this year in Urdaneta, the field it used to operate and where it is now a 40% partner with PDVSA, in an effort to boost production over the midterm.

"Production will remain stable, but starting in July we will drill some new wells. But the idea of the joint venture is to increase production. The business plan is to reach 60,000b/d, it will take a couple of years," he said.

Shell and PDVSA still need to agree formally on the 2006 E&P budget but Rooney said the budget allowed for this year is in the order of US$70mn, of which Shell will finance 40% and PDVSA the rest.

A shallow-water rig from Maersk currently being used by PDVSA will be used for the Urdaneta E&P program, Rooney added.

The recent change in status from oilfield operator to partner with PDVSA suits Shell just fine, according to Roonery.

"Our business model is one of taking the risk, you know, equity production not so much as a service provider. We are quite happy to see the change from a service agreement to a joint venture," he said after attending the inauguration of the Venezuelan Oil Chamber's annual energy conference in Caracas.

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