PDVSA, Petrobras to Form JVs for Mature Fields

Brazil's federal energy company Petrobras (NYSE: PBR) will create joint ventures with Venezuela's state oil company PDVSA to explore mature fields in eastern Venezuela, Brazilian financial daily Valor Economico reported.

Petrobras and PDVSA are in talks to sign four contracts for the exploration of mature fields, the newspaper quoted Petrobras international affairs director Nestor Cervero as saying. PDVSA would control the joint ventures.

The two companies signed MOUs in early 2005 to invest in 20 mature fields in Venezuela to boost their output.

In addition, Petrobras is negotiating with PDVSA for exploration operations in the Orinoco heavy crude belt and other projects in addition to mature fields.

Petrobras already produces oil through four JVs in Venezuela and has estimated reserves of 269 million boe there, according to Petrobras information.


Venezuelan President Hugo Chavez's plans to expand the state's presence in the economy have little impact on Petrobras operations there in terms of reserves and production. As such, the news has had little impact on Petrobras as a whole, Deloitte Petroleum Services group regional manager in Brazil, Mauro Andrade, told BNamericas.

The company's totals reserves stand at 13 billion boe while total production tops 2.3 million boe/d, more than 130 times the 17,000b/d it produces in Venezuela.

"Of course every barrel counts, but the impact on operations is not significant," said Andrade. "The problem is that when the investor looks at a company like Petrobras that has significant investments in Latin America, which is going through instability and changes in opening up its economy, they want to know if the company is making money there."

Petrobras operates in Venezuela through its wholly owned subsidiary PESA, controlled through Petrobras' Argentina-based unit Petrobras Energia.

Chavez's plans are expected to have little impact on Petrobras' overall performance worldwide and in Venezuela itself since current projects and new contracts already include changes in Venezuelan legislation.

So far Chavez has focused his attention on power companies, the Orinoco upgrading assets and telecommunications.

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