Reactions: Carabobo news surprises industry
Carabobo news surprises Industry
Venezuelan and international oil analysts and press were quick to ponder the future of the Carabobo tender for seven heavy crude blocks in the Orinoco belt after the country's official gazette reported the government had awarded two of the blocks to a Russian consortium.
"This could be a mistake," an industry source told BNamericas.
"The agreement originally signed with Russia involved these areas of Carabobo, however, [oil minister Rafael] Ramirez supposedly changed this in his latest trip to Russia and he granted a block in the Junín area to the Russians."
If it is indeed a mistake, the government would be forced to publish a clarification in the official gazette, the source continued.
Venezuela's state news agency ABN reported 3 June that a consortium formed by Gazprom, Rosneft, Lukoil, TNK-BP and Surgutneftegaz would develop the Carabobo 1 Centro and Carabobo 1 Norte blocks.
Both blocks had been included in the tender.
ABN did not mention the status of the Carabobo tender, causing wide press speculation about the status of the round.
"I think it is clear that the Carabobo auction is not moving forward for a variety of other reasons," another industry source said. "I expect this will turn into a direct award to a politically aligned national oil company."
The oil and energy ministry (Menpet) launched the widely awaited round last year.
Besides creating JVs to operate the seven new blocks, the round also calls for the construction of several heavy crude upgraders with capacities around 200,000 barrels per day.
State oil company PDVSA said in December that 19 companies had bought the $2 million data package for the round.
PDVSA in April announced delays to the round and the due date for bids was changed to 28 July from 16 April.
Winners are due be announced on 14 August, according to the most recent information from the company.
While PDVSA will require at least a 60% stake in any JVs formed from the tender process, the company is expected to ask JV partners to finance at least 30% of its share.
The 202 square kilometre Carabobo 1 Norte Block has 15.9 billion barrels of proven reserves there are roughly 20% of the total, Menpet said when it launched the round last year.
The 180 kilometre Carabobo 1 Centro Block has 14.5 billion barrels of proven reserves.
Companies that had bought the data package for the Carabobo round include British oil company BP; California-based Chevron; China's CNPC and Sinopec; Colombia's Ecopetrol; Italy's Eni; Portugal's Galp; Japanese companies Inpex, Jogmec and Mitsubishi; India's ONGC; Brazil's Petrobras; Malaysia's Petronas; Norway's StatoilHydro; France's Total; the Russian consortium; and Venezuela’s Suelopetrol.
Industry analysts have speculated that PDVSA's financial problems and the recent nationalisation of the service industry could put the round at risk.
Others argue that companies will always be interested in new Venezuelan acreage because of the sheer reserve potential.
Oil minister and president of PDVSA Ramirez and Russia's deputy prime minister Igor Sechin in March signed an agreement to form a JV to develop the Junin 6 Block in the Orinoco belt.
Nearly $6 billion could be invested to develop the 448 square kilometre block, PDVSA said in a statement at the time.
Last July, PDVSA signed agreements with Russian oil companies Lukoil, Gazprom and TNK-BP for new reserve certification works on the Orinoco.
Lukoil said it would work with PDVSA on the Junin 3 Block.
Gazprom is set to perform certification activities on the Ayacucho 3 Block and TNK-BP will work with PDVSA on Ayacucho 2.