Petrobras Energia Earmarks Part of Budget to Venezuela

Argentine energy company Petrobras Energia plans to invest about 50%, or US$ 1 billion, of its 2004-2008 investment budget in Venezuela, a company source told BNamericas. The company will invest about 40%, or US $800 million, in Argentina, and the remaining US $200 million in other countries, the source said, adding the actual amounts depend on how the company's exploration and production (E&P) portfolio shapes up in the next few years.

Of the total US $2 billion, estimated at US $400 million/year for the next five years, the company would spend about US $1.4 billion on E&P, the source said, adding that the entire investment in Venezuela will be in E&P.

Meanwhile, the company expects Venezuela's state oil company PDVSA to approve its investment plans "soon," which will enable the World Bank's financing arm International Finance Corporation (IFC) to pay out a US $105 million loan signed in July this year, the source said. Petrobras Energia requested the loan to help finance increasing production at its Oritupano-Leona, La Concepcion, Mata and Acema fields. According to the IFC, the funds will be used for drilling new producing and water injector wells, the construction of new field facilities, and workovers on existing wells. If PDVSA approves the plans in the fourth quarter, Petrobras Energia would invest a total of US $350 million this year in Latin America, of which US $300 million would be in E&P. However, if PDVSA delays giving its approval, Petrobras Energia would end up only investing US $300 million in 2003, of which US $250 million - 260 million would be in E&P, the source said.

In Argentina, the company would consider offshore exploration "sometime in the future" to replace declining reserves on its mature onshore fields, the source said. "In the short term there will be no offshore exploration, but logically [Petrobras Energia's Brazilian parent, state oil company] Petrobras has a lot of experience in offshore, so it could happen some time," the source said, adding Petrobras Energia currently has no offshore concessions.

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