March 18, 2005
Staoil in negotiations with Venezuela for Sincor 2 project

(Reuters) - "Negotiations with the Venezuelan government are expected to begin in April for a second Sincor synthetic crude project. 'We have been given indications that negotiations can start in early April, Statoil's vice president of exploration and production Peter Mellbye told Reuters.

Sincor upgrades 200,000 barrels per day of extra heavy crude from Venezuela's Orinoco region into 180,000 bopd synthetic crude. Sincor 2 would double that output. The second Sincor could cost up to $5 billion over five years and could be completed within six years, Mellbye added, noting that production could start by 2011.

He also said Statoil wants the Sincor 2 project to include both crude production and upgrading of Orinoco oil. Venezuelan officials have said investors could opt to invest in the production or upgrading phase separately. Total holds a 47% stake in the current Sincor project, Venezuela's state oil company PDVSA holds 38%, and Norway's Statoil 15%. The Norwegian company expects to take a similar stake in Sincor 2".