Report: Oil sector to invest US$39bn in 2004-2009

Investment in Venezuela's oil sector in 2004-2009 is expected to reach US$39bn, local media petrofinanzas.com quoted Ali Rodriguez, president of state oil company PDVSA, as saying. Total spending in the six-year period would be divided between exploration (US$6bn), production (US$11bn), gas (US$5bn), petrochemicals (US$3.5bn), refining (US$2.5bn), orimulsion and coal (US$2bn), projects on the Orinoco belt (US$4bn) and operating agreements (US$5bn). PDVSA would put up US$21bn of this spending itself, existing associations would provide US$5.85bn, partnerships with third parties US$10bn, and financing would provide US$2bn. The company's long-term strategy would emphasize four main areas, Rodriguez said: exploration, gas, the monetization of heavy crude reserves, and downstream projects designed to add value to oil and gas. UPSTREAM PDVSA's own upstream work will focus on expanding drilling in existing fields and expanding E&P spending on contiguous or nearby areas, so as to make the best use of existing infrastructure. In offshore projects, the company would seek to team up with foreign companies in order to benefit from their experience, Rodriguez said. Rodriguez confirmed that PDVSA would develop the Tomoporo field, in western Venezuela's Trujillo state, by itself, without offering it to the private sector as was previously planned. Tomoporo is currently producing 110,000 barrels a day (b/d), and is expected to increase to 143,000b/d in 2004 and 250,000b/d in the "medium term," Rodriguez said. In 2004, 750 wells would be drilled in the east of the country and 600 in the west, with 102 drill rigs, of which 80 would be based in the east and 22 in the west. TENDERS The business plan includes tendering seven oil and non-associated gas fields in the Gulf of Venezuela and the northeast of Falcon state, and giving a license to a local company to build a multi-product pipeline between the Paraguana refining complex and Ule. Other aspects of the business plan include the construction of a gas pipeline with Colombia, and discussions with Brazil's federal energy company for the construction of a refinery in Brazil's Pernambuco state. However, Venezuelan companies are reportedly complaining that PDVSA has not disclosed investment amounts for specific projects or geographical areas, and that the company does not have enough managers to plan all the "good intentions" announced. PRODUCTION According to newspaper El Universal, PDVSA and the ministry of energy and mines are considering three different production levels for the 2004-2009 business plan. One puts the country's total oil production at 4.3 million barrels a day (mb/d), the second puts it at 4.6mb/d and the third puts it at 5mb/d. In the third scenario, PDVSA's own production would be 3.47mb/d. The production would be in line with growing world oil demand, hydrocarbons secretary Luis Vierma said, detailing that world demand is forecast at 89mb/d by 2009, of which OPEC countries would provide 34mb/d. Meanwhile, Dow Jones reported Wednesday that PDVSA output fell 12% from the third quarter 2002 to the same period this year, while output by foreign partners increased 30% in the same comparison.