Chevron consortium to develop Carabobo venture in Venezuela - Related Stories - API SmartBrief

Chevron Corp. and Repsol YPF SA will lead development of two $15 billion projects to pump and refine Venezuelan crude after winning the country's first oil auction since President Hugo Chavez took office 11 years ago.
Chevron, Mitsubishi Corp., Inpex Corp. and Suelopetrol CA will take a combined 40 percent stake in the area called Carabobo 3 area, Oil Minister Rafael Ramirez said late yesterday in Caracas. Output will start in 2013 and rise to 400,000 barrels a day in 2016, he said. State-run Petroleos de Venezuela SA, or PDVSA, will hold 60 percent.
Repsol, Oil & Natural Gas Corp., Petroliam Nasional Bhd., Indian Oil Corp. and Oil India Ltd. will develop Carabobo 1 with PDVSA to pump 480,000 barrels a day, he said.
The Carabobo projects, along with similar ventures with Eni SpA, PetroVietnam and a group of Russian companies in the neighboring Junin field, are central to Venezuelan plans to boost oil output.
“Foreign oil investment is absolutely necessary to develop our reserves,” Chavez told company executives in a ceremony at the presidential palace. “We can't do it alone.” He said the U.S. Geologic Survey found the Orinoco Belt has more than 500 billion barrels of recoverable crude.
The ceremony ended a selection process that began in 2008 and faced repeated delays. Of 52 companies that Venezuela invited to bid, 19 paid for field data and the two winning teams were the only publicly announced bidders.
“It seemed like an act of resistance to the lack of legal security” for companies to abstain from bidding, Carlos Caicedo, head of Latin American forecasting at Exclusive Analysis in London, said in an interview. The lack of response left one project, known as Carabobo 2, unassigned.
Total SA, France's biggest oil company, may have decided against bidding because of the Jan. 17 nationalization of Exito stores in Venezuela, which were owned by Casino Guichard- Perrachon SA of France, Caicedo said.
“It's like a business, where I invite you to jump in a tandem parachute from 20,000 feet, and you say ‘no, I can't',” Chavez, a former paratrooper, told reporters after the ceremony. “Each is free to follow his interests.”
Madrid-based Repsol, ONGC of New Delhi and Petronas of Kuala Lumpur will each take 11 percent share in their joint venture while Indian Oil and Oil India will split a 7 percent stake and PDVSA will hold 60 percent, Nemesio Fernandez-Cuesta, Repsol's executive vice president for exploration and production, told reporters.
Chevron, of San Ramon, California will take 34 percent of its project while the three Japanese partners will split about 5 percent and Caracas-based Suelopetrol will start with 1 percent, Ali Moshiri, president of Chevron's Africa and Latin America unit said. The venture is supposed to form by March 24, he said.
The Repsol venture must pay $200 million of a $1.05 billion signing fee within 10 days of the incorporation, Baldo Sanso, the consultant who coordinated the bid process, said in an interview. The Chevron-led group will pay $100 million of its $500 million signing fee at that time, he said.