February 22, 2006
Authorities want Chevron to increase output in Venezuela

(El Universal) - "Venezuelan authorities have proposed US Chevron a plan to increase oil output by 16.6 percent and repay royalties with the production excess, a corporate manager reported.

The proposal coincided with an announcement last week by Minister of Energy and Petroleum Rafael Ramírez. The senior official had voiced willingness to upgrade the operations of heavy oil by means of agreements on royalties and production.

'The minister has pointed to increasing capacity and payment of royalties with the excess of production,' Ali Moshiri, the head of Chevron Division of Exploration and Production for Latin America , said during a telephone conversation.

In 2004, Venezuela terminated the exemptions for heavy oil operations and raised royalties from 1 to 16.1 percent.

Moshiri explained that Venezuela would use this modality to expand oil output in Hamaca, a project of heavy oil in Orinoco Western Belt.

'We need to create an environment to push production from 197,000 bpd to 230,000 bdp,' the director of the corporation based in California clarified, as quoted by AP.

Conoco Phillips and state oil company Petróleos de Venezuela (Pdvsa,) with a sharing of 30 percent are also working on the Hamaca project".