PDVSA to Invest up to US$45bn through 2010

Venezuela's state oil company PDVSA plans to invest about US$40bn-45bn to increase its production capacity to 5-6 million barrels a day (mb/d) by 2010, PDVSA VP Aires Barreto said at a conference in Washington DC.

PDVSA's current production is about 3.1mb/d, according to government officials, though private studies put the figure closer to 2.6mb. In its business plan through 2010, PDVSA will focus on four main activities: monetizing heavy crude production, exploring for medium and light crude, developing its gas business, and downstream activities, Barreto said in a statement.

The company will invest about US$5bn a year in the next few years, with emphasis on exploration and production, followed by investment in strategic associations, which will mainly be in integrated projects in the Orinoco belt, he said.

Meanwhile, Venezuela's energy and mines ministry plans to strengthen PDVSA's international arm Citgo in line with its new strategic plan to add value to exports, minister Rafael Ramirez said at the conference. The ministry also aims to attract more private investment in Venezuela. "We are committed to welcoming these kind of investments because we know we can't prosper as a country without participating in international business," Venezuela's ambassador to the US Bernardo Alvarez said. "We are working diligently to show all the advantages that Venezuela has to offer," Alvarez added.

The Venezuelan government and PDVSA officials have been working hard to repair the company's international image after a national workers strike against President Hugo Chavez in December-January devastated the country's oil industry. The company fired about 45% of its staff (about 18,000 workers) and replaced many experienced managers with Chavez supporters. Despite speculation that the company now lacks the resources and personnel to maintain production, PDVSA president Ali Rodriguez says production has recovered to pre-strike levels and is set to double in the coming years with recent new discoveries in the eastern Monagas state.

PDVSA is also continuing with plans to develop the country's offshore natural gas resources. It awarded two blocks on the Deltana platform in February and plans to award two more in August and seven blocks in the Gulf of Venezuela off the coast of Falcon state by the end of the year. "Our reserves make Venezuela a center of energy excellence in the Western hemisphere. We need to work so that the hydrocarbons sector contributes to achieving sustainable development, and for that we count on the support of our international commercial partners, because private capital is a friend for the Venezuelan government," minister Ramirez said. Venezuela has total estimated offshore reserves of 20.5 billion barrels of crude and 82 trillion cubic feet of gas.

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