August 19, 2005
Venezuela to invest 56 billion dollars to boost oil production

(AFP) - "Venezuela is planning a massive upgrade of its oil production capacities, starting with a seven-year investment of some 56 billion dollars.

President Hugo Chávez announced the plan as part of a 25-year plan to modernize the oil-field facilities in the South American nation.

Chávez said about 70 percent of the 56 billion dollars would be funnelled through the national oil company PDVSA and 30 percent in other projects with national and international firms.

One of the projects is to boost the output from the Orinoco, which has massive reserves of heavy and ultra-heavy oil that is more difficult to recover than other types of petroleum. The region currently produces about 600,000 barrels per day.

'We have to use the oil backbone to help the total develop the entire country,' Chávez said.

The Venezuelan leader noted that there have already been agreements with companies in Brazil, India, China, Russia, Iran and Spain and talks have been held with Uruguay and Argentina to develop sites within the massive Orinoco oil-field.

He said some international companies are operating in Orinoco, 'but not like before,' citing his reform that raised royalties paid to the state to 16.6 percent from one percent.

Chávez said the plans also call for a massive upgrading of the country's oil infrastructure including refining and storage systems. Three new refineries are planned, and Chávez hopes to nearly double the country's refining capacity to some two million barrels per day.

The president said another project he dubbed Delta Caribe would aim to ramp up natural gas production both for electricity and for export throughout South America and the Caribbean region.

Venezuela has proven reserves of 148 billions cubic feet of natural gas, the eighth largest in the world and 2.4 percent of the global total (...)".