July 30, 2006
Iran will spend $4 billion in 2 Venezuelan oil fields
(Dow Jones) - "Iran's state-owned Petropars oil and gas company is investing around $4 billion in the explorations and developments of two oil fields in Venezuela, Iran's Oil Minister Kazem Vaziri Hamaneh said.
'The level of investment in the two Venezuelan oil fields is estimated at $4 billion, which will amount to Petropars' largest investment outside the country, 'Vaziri said in press briefing after negotiations with his Venezuelan counterpart, Rafael Ramírez, who arrived Saturday in Tehran.
Petropars, affiliated to the National Iranian Oil Co., was established in 1998 and is currently involved in a number of oil and gas projects in Iran. It is also intent on expanding its operations outside Iran.
Without naming the two Venezuelan oil fields that Petropars will be investing in, Vaziri said work has already begun at one of them.
Vaziri said the financing for the two fields will come from international financial sources and not domestic ones.
Petropars had previously announced that its first foreign investment venture involved the development of a heavy oil field in the Gulf of Venezuela.
The company will develop bloc 7 of the 540 square-kilometer oil field for $2 billion. The field has an estimated 18 billion barrels of in-place oil.
Petropars also has studied a gas field in the Gulf of Venezuela and one in the northern Falcón gas field.
In the petrochemical field, Vaziri said Iran and Venezuela have agreed on two joint ventures, adding that the general outline on the establishment of a petrochemical company to follow up on the agreements has been finalized.
Iran also has asked Venezuela to become a partner in a planned refinery in Indonesia.
A memorandum of understanding was signed earlier this year between the National Iranian Oil Refining and Distribution Co. and Indonesia's PT Pertamina to build a $5 billion, 300,000 barrel-a-day oil refining facility in East Java.
Iran and Venezuela also agreed to, along with Indonesia, build a refinery in Venezuela. The feedstock for the proposed refinery would come from the Venezuelan oil field in which Petropars is currently involved.
Vaziri said the two ministers also discussed gasoline imports to Iran.
'If the agreement on the purchase of gasoline is signed and finalized today between the two countries, three consignments of gasoline will be imported from Venezuela,' Vaziri said.
Vaziri said the quality of Venezuelan gasoline differs from Iranian, and that is impeding an agreement. He said the issue is being studied.
Iran relies on imports for about 30% of its domestically consumed gasoline. That amounts to about $5 billion a year. The government and the Parliament are currently debating the idea of importing around $3 billion worth of gasoline to meet demand in the second half of the year in September.
A Venezuelan delegation led by that country's President Hugo Chávez arrived Saturday in Tehran on a two-day official visit. The meeting comes ahead of the Organization of Petroleum Exporting Countries' Sept. 11 meeting in Vienna. Both countries are OPEC members".
