Venezuela Sees $172M Exploration Invest in Four Gas Blocks

CARACAS Aug 08, 2006 (Dow Jones Commodities News via Comtex)

Venezuela expects to invest $172 million by 2010 in exploration campaigns at four new natural gas blocks with help from private firms, Petroleos de Venezuela SA said Tuesday.

Three of the four blocks are located north of Margarita Island in the Caribbean, while the fourth block is located along Venezuela's Atlantic coast, south of Trinidad. PdVSA will hold stakes ranging from 30% to 35% in each block, which together hold an estimated 11 trillion cubic feet of natural gas reserves.

"We're looking for partners," said PdVSA President Rafael Ramirez at an event to announce details of the licensing round.

According to PdVSA, it has invited a total of 36 companies to participate in the licensing round. PdVSA plans to award the four licenses by the end of November, with the first commercial natural gas production coming before 2012.

Interested firms have until Aug. 18 to express interest and pay $350,000 for a data package on the four areas.

Venezuela is looking to plug a 1.15 billion cubic feet per day domestic gas deficit by 2008, and hopes to bring new reserves on line with help from private firms.

PdVSA needs the gas for existing oil operations, which currently consume 70% of natural gas production, and to help power expansion plans at the vast Orinoco heavy oil basin where the country hopes to double output over the next six years.

PdVSA is making some small steps in this direction. Argentina's Pluspetrol Resources Corp. began a $40 million exploration campaign at two new gas fields in June after winning licenses for the two blocks in 2001.

Last year the company sold five gas exploration licenses to foreign firms like Chevron Corp. (CVX) and Brazil's Petrobras (PBR).

PdVSA plans to nearly double natural gas production to 11.5 billion cubic feet per day by 2012 with over $16 billion in investments.

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