Venezuela to Explore for Gas in Nation's Gulf Area

In the first half of 2004, Venezuela will start to explore natural gas in the Gulf of Venezuela, close to the maritime border with Colombia, President Hugo Chavez said Thursday.

"Very soon we will start to explore there, to look for the gas we have in Venezuelan waters," said Chavez, speaking at an event in Maracaibo, the capital of Zulia State which is close to the Gulf of Venezuela.

Venezuela and Colombia have had a border dispute in that area that was never finally settled. However, a manager of state-owned oil monopoly Petroleos de Venezuela said last month the Foreign Ministry would look into the project.

Exploring the Gulf forms part of Venezuela's plans to offer seven offshore natural gas blocks in western Venezuela to foreign oil companies by the first half of next year. Venezuela already 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 the end of this month. 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.