Venezuela Signs Plataforma Deltana Agreements

Venezuela has signed key agreements between the government, PDVSA and four potential foreign partners. The agreement largely confirmed which companies will be responsible for developing the Plataforma Deltana gas field, which is situated in Venezuelan coastal waters adjacent to the country's maritime border with Trinidad. Foreign companies involved in Friday's signing ceremony were ChevronTexaco, BG Group, TotalFinaElf and Statoil.

Venezuela has natural gas reserves of 147 trillion cubic feet, the eighth-largest in the world. The government hopes that by learning from its foreign partners, PDVSA will eventually be able to bid for future offshore projects in Colombia, Mexico and Brazil. PDVSA is currently placing great emphasis on increasing natural gas production.

Friday's agreement designates the BG Group-ChevronTexaco consortium as the Venezuelan government's preferred bidder for Block 2 of the gas field. The two companies had been widely tipped to secure this block as they already operate the adjacent concession in Trinidad. The agreement means that the partner companies are likely to sign a final agreement to begin work in the area within the next few months, barring the unlikely event that they fail to reach agreement with the Venezuelan authorities over terms and conditions.

The agreement establishes that Statoil and TotalFinaElf will proceed to a second round of competitive bidding for both blocks 3 and 4. The Venezuelan government is expecting to decide the winner within the next few months, opening the way to a final agreement on the two blocks. BP was designated the government's preferred bidder for Block 1, but the company's representatives will sign the memorandum of understanding in a separate ceremony. ExxonMobil failed to secure an option on any of the first four blocks, however, the company is still in the running for Block 5, along with several other companies, including Repsol. Ramirez said his ministry had not reached a decision about its preferred bidder for Block 5 because several technical questions still remained to be resolved. Block 5 is the largest and most complex of all the concessions with average water depths of around 550 feet.

The Plataforma Deltana field is estimated to hold at least 38 tcf.