July 31, 2006
Venezuela prepares bid round for 6 natural gas blocks

(MarketWatch) - "Venezuela is preparing a bidding round for natural gas blocks that could come as early as this month, a government energy official said.

The round will include exploration and production licenses for six offshore natural gas fields. Venezuela is looking to plug a 1.15 billion cubic feet per day domestic gas deficit, and is inviting foreign firms to help develop its vast reserves of the fuel.

State firm Petróleos de Venezuela SA needs the gas not only for existing oil operations, which currently consume 70% of natural gas production, but to power expansion plans at the vast Orinoco heavy oil basin where the country hopes to double output over the next six years.

PDVSA is making some small steps in this direction. Argentina's Pluspetrol Resources Corp. began a $40 million exploration campaign at two new gas fields in June after winning licenses for the two blocks in 2001.

The government source said the next six offshore blocks include three in the Blanquilla area, one in Punto Pescador, one in Corocoro and one in the Deltana platform.

Last year the company sold five gas exploration licenses to foreign firms such as Chevron Corp. (CVX) and Brazil's Petrobras (PBR).

PdVSA plans to nearly double natural gas production to 11.5 billion cubic feet per day by 2012 with over $16 billion in investment. Analysts, however, say the company hasn't been investing enough to follow through with this plan".