Venezuela to Hold Licensing Round in Early 2004

Venezuela plans to offer the first of seven offshore natural gas blocks to foreign oil companies by the first quarter of next year, a top executive of state-owned PDVSA said Wednesday.

"We plan to develop those fields with help from third parties and by March next year we could have a bidding round for the first block," said Carlos Barbieri, manager of the Deltana Platform, where two of the five blocks are currently being developed by foreign oil companies.

"We already have made a selection of eight to 10 foreign companies that are interested in developing those new offshore fields," said Barbieri, speaking at an oil conference in Maracaibo.

The first field is in the Venezuelan Gulf region, close to the maritime border with Colombia. Despite the fact Venezuela and Colombia have a border dispute in that area that has never been settled, Barbieri doesn't think it will cause any problems. "The Foreign Ministry will be involved in this project because of that issue," said Barbieri. Venezuela awarded a block of the Deltana platform last year to ChevronTexaco and ConocoPhillips while a second block went to Statoil.

Two other blocks are expected to be awarded by mid-December this year, Barbieri added. The government will receive the offers Nov. 28, he said. A fifth block is expected to be operated by PdVSA.

The Deltana Platform is close to the maritime border between Venezuela and Trinidad. The platform contains an estimated 38 trillion cubic feet of gas and could bring $4 billion in foreign investment to Venezuela in six years. The natural gas produced from the fields will be processed into liquefied natural gas, or LNG, and exported to the U.S.

Venezuela is aggressively moving to develop its natural gas industry. In addition to the natural gas sector being 100% open to foreign investment, all downstream activities in the oil sector are also completely open.