April 5, 2005
Chevron hopes to invest in new Orinoco belt project before the end of 2005

(Dow Jones Newswires) - U.S. oil major ChevronTexaco Corp. hopes to begin investing in a multi-billion-dollar heavy crude project in Venezuela's Orinoco tar belt before the end of this year, said Ali Moshimi, the president of the company's Latin America upstream projects.

Chevron and Spain's Repsol YPF announced plans for a joint project to refine extra-heavy Orinoco oil into synthetic crude and transport it through a new regional pipeline. Moshimi said the project would cost $5 billion to $6 billion.

'We're hoping to start basic investment in late 2005,' said Moshimi, speaking to reporters at a natural gas event Monday.

According to Venezuelan law, state oil company Petróleos de Venezuela must have at least a 51% stake in any new upstream oil projects.

The deal marks the latest interest by oil majors in Venezuela's tar oil. Norway's Statoil (and France's Total hope to begin a similar project this year, and Royal Dutch Shell Group has also expressed interest in a heavy crude venture with PdVSA in the area.

Chevron already has a 30% stake in an existing project in the Orinoco, known as Hamaca. The new project will be Repsol's first heavy oil venture in Venezuela.

Separately, Moshimi said Chevron has found 'commercially viable' natural gas supplies in block 3 of Venezuela's Deltana platform, where the company recently finished its first well. Chevron also operates block 2 in the Deltana platform, and plans to begin exporting Liquefied Natural Gas, or LNG, to the U.S. from Venezuela starting in 2005.

Moshimi said Chevron plans to invest $400 million in Venezuela this year, the same amount the company invested in 2004.