Intro4u2u

Venezuela’s Ministry of Energy and Mines revealed today that it has increased the number of

heavy oil blocks in the country’s Orinoco Belt up for bid to seven from the original four

announced at the end of last month.

The ministry said that it has had expressions of interest in participating in the bidding

for the Orinoco blocks from 21 companies. They will be able to obtain a maximum of 30%

interest in the blocks, since Petroleos de Venezuela (PDVSA) will hold at least 70%.

The seven blocks are situated in the Carabobo concession area, which is believed to harbor

very large reserves capable of producing between 200,000 and 400,000 b/d of heavy oil. The

original four blocks are the Carabobo 1 Norte, Carabobo 1 Central, Carabobo 2 Norte, and

Carabobo 4 Oeste.

Rafael Ramirez, Venezuela’s minister of petroleum and president of PDVSA, said that

companies interested in investing in the Carabobo blocks must submit a funding plan, but

that they can be assured that their investments in Venezuela will be secure under the

country’s new fiscal regime, which guarantees the conditions for hydrocarbons development

are permanent. Development of the blocks involves the construction of two upgraders by 2014

that are to be located in southeastern Venezuela’s Anzoategui state and be capable of

producing 200,000-240,000 b/d. Ramirez said Venezuela will invest US$ 6 billion to build

each upgrader, and that the amount is under review and could vary because of the cost of

materials.

Data packages will be available after 27 November, with bids due between 9 and 22 January

2009, bids opened on 16 April, and winners announced on 7 May. Contracts are expected to be

signed on 4 June.