Venezuela OKs Chevron operation of offshore gas field

[ChangoLoa]

Venezuela allowed the US energy corporation Chevron to develop gas in the Block 2 of Plataforma Deltana, an offshore project in the northeast of the country, according to a resolution released on Thursday.

US Chevron, Norway's StatoilHydro and France's Total will participate in the development of the Deltana Platform, which is one of the largest natural-gas projects on the Venezuelan coast, with 7 billion cubic feet of certified gas reserves so far, Reuters reported.

The resolution, which was published in the Official Gazette, stated that the hydrocarbon gas reserves found in Block 2 are large enough to ensure a profitable development, as well as the supply of natural gas for gasification projects in the domestic market and the first liquefied gas train in eastern Venezuela.

Link:
http://english.eluniversal.com/2010/04/08/en_eco_esp_venezuela-oks-chevro_08A3711293.shtml

[protocol rv]

1. The gas was found by Chevron, and it's connected to a field in Trinidad waters

This is interesting, as you know we have a natural gas shortage, and this gas was found by Chevron a few years ago. They've been negotiating with PDVSA ever since. The thing is, the field straddles the border with Trinidad, and I heard Chevron told PDVSA if they didn't make the deal they would go ahead and develop the Trinidad side - which means some of the gas on the Venezuelan side would be sucked over the border.

This is good news because it may bring some jobs, although the devil is in the details. It also should relieve the gas shortage, a reason why we are importing gas from Colombia at this time.

I bet when the terms are published they'll describe a deal where PDVSA doesn't have control, and there is international arbitration. If this is the case, then the multinationals are coming off their vulture position, and are starting to feed. Watch out for the key figure, what's PDVSA's share going to be? if it's 51 %, then they aren't on their knees yet, if it's less than 51 %, then it shows weakness, and I think we're headed back to the old days, pre-1976, when foreign multinationals had a big role to play in the oil and gas business in Venezuela. Notice I said pre-1976, because this contract Chevron had was highly unusual, and it allows foreigners to own a majority of the shares.

Time will tell.