THE WALL STREET JOURNAL: Shell Hopes To Keep 30% Stake In Venezuela Nat Gas Deal: (ShellNews.net) Posted 8 April 05
DOW JONES NEWSWIRES
CARACAS -- Royal Dutch/Shell Group (RD SC) hopes to keep a 30% stake in the revamped Mariscal Sucre natural gas project in Venezuela, said Sean Rooney, the company's president for Venezuela.
In 2003, the Hugo Chavez administration agreed to develop the $2.7 billion project with Shell and Japan's Mitsubishi. But the partners failed to sign a deal, and this year Petroleos de Venezuela (PVZ.YY) decided to split the project into separate upstream blocks and invite other firms to join in.
"We're still working with 30% Shell and 8% Mitsubishi. I'm not sure how the other 62% will be divided," Rooney told reporters following an oil conference Wednesday.
The project will be split into at least two development blocks, one that includes natural gas liquids and one with only natural gas. NGLs fall under separate legislation in Venezuela, forcing PdVSA to hold at least a 51% stake in any fields that include liquids.
The project also involves a processing plant along the eastern coast. According to Rooney, the plant would collect natural gas output from the entire region to supply the domestic market and exports. Venezuela hopes to launch natural gas exports in 2009.
The president of Mitsubishi Venezuela C.A., Yasushi Iwamatsu, said the company is "still interested" in the gas deal but is waiting for PdVSA to define the terms.
"We are waiting for the final details. We have been waiting for 15 years," said Iwamatsu, speaking to reporters on the sidelines of an oil event.
PdVSA first discovered the gas fields in the late 1970s, and plans for the first LNG project in the area with Shell and Mitsubishi, known as Cristobal Colon, since the 1980s.
This year PdVSA signed a memorandum with Brazil's Petrobras (PBR) to study project participation. Gerson Fernandes, president of Petrobras' Venezuela operations, said the company is studying the area, but PdVSA must decide the timetable for development and the partnership structure.
"We'd like 100%, but you'd have to ask PdVSA, which is the owner of the resource," said Fernandes.
At 148 trillion cubic feet, Venezuela has the second- largest natural gas reserves in the Western Hemisphere but has been slow in developing the industry. Venezuela currently has a natural gas deficit and plans to begin importing the fuel from neighboring Colombia until domestic production increases.
Venezuela is the world's fifth-largest exporter of crude oil and a major supplier to the U.S. The Andean nation plays a key role in the Organization of Petroleum Exporting Countries.
-By Peter Millard, Dow Jones Newswires; 58-212-564-1339; peter.millard@dowjones.com;
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