Venezuela seeks foreign investment in 2 oil finds

Forbes.com-Reuters, 04.22.03, 5:38 PM ET By Manuela Badawy NEW YORK, April 22 (Reuters) - The government of Venezuelan President Hugo Chavez is seeking to attract foreign investors to help develop new oil projects following a crippling anti-government general strike that slashed oil revenues of the world's No. 5 crude exporter earlier this year, Venezuela's ambassador to the United States said on Tuesday. The OPEC nation will tender two new oil fields to foreign companies before the end of this year to oil majors from the United States and Europe, Ambassador Bernardo Alvarez told investors in New York. On the block are the Orocual field in the eastern Furrial region and Tomoporo, which has about 500 million barrels of estimated oil reserves, from the western Lake Maracaibo area. Among the companies interested in operating the fields are Exxon Mobil Corp. (nyse: XOM - news - people), ChevronTexaco (nyse: XOM - news - people), Marathon Oil Co. (nyse: XOM - news - people), Italy's ENI <ENI.MI>, France's TotalFinaElf <TOTF.PA>, Norway's Statoil <STL.OL> and Spanish-Argentine company Repsol-YPF <REP.MC>, said Alvarez, who previously served as a Venezuelan vice-energy minister. Alvarez said U.S.-Venezuelan energy relations should be strengthened as the economies of both countries are interconnected. Venezuela in the past has supplied up to 14.7 percent, about 1.7 million barrels per day (bpd), of all the oil imported by the world's largest consumer, he said. Venezuela's crude exports, which provide half of the government's revenues, were severely cut during the two-month strike started Dec. 2 by opponents of President Hugo Chavez. The loss of shipments from one of its top four suppliers sent U.S. crude prices soaring before troops and replacement workers restored Venezuela's oil production. Government officials say Venezuela's state oil firm Petroleos de Venezuela S.A. (PDVSA) is now pumping at pre-strike levels of over 3 million barrels per day (bpd) of oil. But analysts say that PDVSA may be seeking foreign investment to help compensate for losses incurred during the strike which forced cuts in the exploration and production budget of South America's largest oil firm. Venezuela's oil fields have natural depletion rates of about 25 percent per year, forcing PDVSA to invest heavily to maintain production capacity. Foreign companies have been critical of a nationalistic hydrocarbons law passed by Chavez in 2001 that increased royalty payments and the minimum level of state participation in oil developments. They say the terms are not competitive with contracts offered by other countries and need to be amended. Earlier in April Venezuela approved ConocoPhillips' (nyse: COP - news - people) $480 million development plan for the Corocoro field in country's Gulf of Paria West area, which the U.S. oil major was awarded during under a profit-sharing agreement in 1996. Corocoro is expected to reach output of 55,000 barrels per day of 24.5 degrees API oil two and a half years after development begins, ConocoPhillips said. The field partners are ConocoPhillips with Italy's Eni and Taiwan's Chinese Petroleum Corp. PDVSA also has a 35 percent stake in the field