September 10, 2013

Petronas Confirms Withdrawal From Carabobo Project

PETRONAS today confirmed that its subsidiary, PC Venezuela Ltd, has decided to withdraw its 11 per cent participation in the Carabobo project.

In an sms reply to Bernama, a spokesperson of the national oil company said it had communicated to this effect on Aug 27, 2013 to the Venezuelan authorities.

PETRONAS was asked to clarify on a news report saying that it was exiting one of the biggest petroleum projects in Venezuela's Orinoco belt.

In May 2010, PETRONAS, together with partners Repsol YPF, ONGC Videsh Ltd, Indian Oil Corp Ltd and Oil India Ltd, signed a joint venture agreement with Petroleos De Venezuela S.A. (PDVSA) for the development and production of hydrocarbons from the Carabobo Project in the Orinoco region of Venezuela.

The consortium of PETRONAS (11 per cent), ONGC Videsh (11 per cent), Repsol (11 per cent), Indian Oil Corp (3.5 per cent) and Oil India (3.5 per cent) had on Feb 2010 been selected by the Government of Venezuela for a 40 per cent ownership interest in a joint venture company which will develop the Carabobo 1 Norte and Carabobo 1 Centro blocks located in the Orinoco Heavy Oil Belt.

The Corporacion Venezolana del Petroleo (CVP), a subsidiary of PDVSA, Venezuela's state oil company, holds the remaining 60 per cent equity interest.

PETRONAS' interest in the joint venture company was held through its wholly-owned subsidiary PC Venezuela Ltd.

The award of the project to the joint venture company followed an extensive international selection process conducted by Venezuela's Ministry of Energy and Petroleum from late 2008 through 2009.

Under the terms of the agreement, the joint venture company will build heavy oil production facilities, upgrading facilities and associated infrastructure.

The upstream facilities are expected to produce around 400,000 barrels per day of extra-heavy oil, of which about 200,000 barrels per day will be upgraded into light crude oil in a facility to be located in the Soledad area, Anzoategui State.

The company has a licence term of 25 years with the potential for a further 15-year extension.

For PETRONAS, the award was supposed to mark not only its first contract in Venezuela but signified its entry into a major development project in South America.

Apart from Venezuela, PETRONAS has existing interests in two major high-pressure gas transmission pipelines, Transportadora de Gas del Norte S.A. and Transportadora de Gas del Mercosur S.A. in Argentina.

Source: Bernama