Venezuela's Chavez Assigns Oil Block to PetroCaribe Countries

MARACAIBO (Dow Jones Newswires), July 14, 2008

Venezuela's President, Hugo Chavez, set aside an oil block in the Orinoco basin so member countries of PetroCaribe can help develop it. The Venezuelan leader also encouraged countries from Central America and the Caribbean to create their own energy companies that can sign joint ventures with Petroleos de Venezuela SA, further cementing ties to Venezuela's oil industry.

"We should create a PetroCaribe company or a group of handle oil exploitation activities," Chavez told attendants of the V PetroCaribe summit. "From there we would supply the PetroCaribe accord, from the Boyaca 3 block (in the Orinoco). That block is available."

Chavez said PdVSA would hold a 60% controlling share in such a venture, with the PetroCaribe company holding the remaining 40%. "We would be partners then," he said. "It would be a grand national PetroCaribe company to create joint ventures with countries and to participate in the Orinoco."

The Venezuelan president offered technical assistance so neighboring countries can create their own state-owned energy companies. Another key objective of PetroCaribe, Chavez said, is to process crude within the region instead of sending all of it to be refined in the U.S. "We will continue to send crude to the U.S. (for refining)," Chavez added, but said Venezuela will continue to increase the amount refined in the region.

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