July 23, 2006
Argentina and Venezuela sign oil agreement
(Argentine news agency Telam) - "Argentina and Venezuela signed an agreement today designed to advance oil exploration efforts on the Orinoco Belt, an investment that will require 4bn US dollars.
'The agreement will allow Argentina to increase by 50 per cent its oil supplies to the local market', Federal Planning Minister Julio de Vido explained to Telam.
The minister stated that Venezuelan Petroleum SA (PDVSA) will own 51 per cent of the field, while Argentina's Enarsa (Argentine Energy Inc.) and Uruguay's ANCAP (National Administration of Fuels, Alcohol and Portland Cement) will contribute 50 per cent of the investment in proportions that are yet to be defined.
De Vido stated that the exploration activities will take place in the Ayacucho area of the Orinoco Belt.
That efforts are being made to interest Argentine companies such as Tecpetrol and Pluspetrol, which already operate in the Venezuelan market, in the project.
'These companies will come in as subcontractors for Enarsa and will seek out the necessary funding volumes, but the holder [of the concession] for the area is Enarsa and it will also be the one that decides how to employ the resources,' De Vido stressed.
'The project will demand an investment of 4bn US dollars, 2bn dollars of which will be contributed by Venezuela, which holds 50 per cent plus one of the field's equity,' De Vido explained.
'The idea is to obtain the greatest possible volume of funding for this field with estimated reserves of 1.5bn barrels and an output of 300,000 barrels per day,' the minister stated.
These volumes will lead to a 50 per cent per cent increase in the output currently pumped out by Repsol YPF in Argentina, the minister underscored, adding that 'the companies will channel the crude to the local market, which is currently experiencing growth.'
De Vido predicted, furthermore, that progress will be made with PDVSA in the acquisition of the Rhasa Refinery, and that it is likely that Argentina 'in the future will be capable of integrating with the Sol de Uruguay gas stations to create a River Plate partnership.'
'It would be a partnership among the companies of Argentina, Uruguay, and Venezuela to distill, sell, and enter into the fuel commercialization market,' Minister De Vido added to complete the idea".
