Contact with the New PDVSA

Contact with
the New PDVSA
Bolivarian Republic of Venezuela
Caracas, January 2006 • # 4
A Newsletter about Venezuela’s National Oil Industry
Cornerstone
2
Colombia, Argentina
and Venezuela
point South
6
page
4
Presidents of Venezuela and Brazil, Hugo
Chávez and Luiz Inácio Lula da Silva, begin
construction of the “Jose Ignacio Abreu e
Lima” Refinery in Pernambuco, Brazil
32 transition
agreements
to Mixed
Companies
Venezuela,
a full member
of Mercosur
Citgo expands
delivery of low price
fuel to native
Americans in the US
14
12
East and West
interconnected
by gas
20
19
PDVSA, world’s
third largest oil
company
Contact
with the New
PDVSA
INTEGRAtioN » Angostura and Punto Fijo Declarations reassert energy integration
Argentina, Colombia and Venezuela
foster union in the South
We are sealing the great SouthAmerican pact that we need to
be free; and, as Simon Bolivar said, let’s
We are creating alternatives
for improvement that shall
finally ensure regional integration
make it true. It is possible,
With a brotherhood concept,
we shall always walk together
to recover from poverty, to
build solidarity upon facts
it is not a dream
Hugo Chávez
President of the Bolivarian
Republic of Venezuela
Néstor Kirchner
Álvaro Uribe Vélez
of Argentina
of Colombia
President of the Republic
President of the Republic
Visits from Néstor Kirchner and Álvaro Uribe Vélez, Presidents of Argentina
and Colombia, respectively, reasserted the Petro-American initiative promoted
by the Bolivarian Government of President Hugo Chávez
Once again, South America is
Mercosur, strengthen the South
the land, where dreams come
American countries. We want to be
true; the land of feasible utopias, of
integrated to the rest of the world
concrete utopias as, some say. And
and we are interested in talking
within this map and dynamics the
with all countries worldwide about
Caracas-Buenos Aires axis does
integration, with justice, equity, no
clearly emerge. From the Orinoco River
subsidies, as they are really aberrant
down to the Rio de La Plata, a powerful
and do significant damage to the
new movement has emerged fed by
economies of weaker countries. That
the will and the pain of our people,
is why we say that we believe in
interpreted by what we modestly
integration, but in an integration with
represent, and is taking shape, with its
justice, with equal opportunities”,
own claims, demands and drives. What
stated President Kirchner.
we are doing, I think, is answering the
Fuel for the South
need of our people”, stated President
Hugo Chávez, during the last visit of
Argentine President, Néstor Kirchner, to
Venezuela last November 22nd, 2005.
Presidents Chávez and Kirchner stated that the entry of
Venezuela to Mercosur, is a historic step.
Rafael Ramírez, Venezuelan Minister
of Energy and Petroleum and PDVSA
President, informed that a mixed
In this meeting, taking one more step
insertion and we are sure that every
company will be jointly incorporated
towards their peoples’ union, both
day more and more countries will share
by Energía Argentina (ENARSA),
countries signed various agreements
our vision, our orientation, and this
the Argentine energy company and
which enable the undertaking and
strategy”, stated President Chávez.
PDVSA, which will be in charge of
completion of projects related to
supplying up to 5 million barrels per
the hydrocarbon sector, as well as
“We have taken a historical step in
year of industrial and automotive gas
knowledge and technology exchanges.
the bilateral relationship and I think
oil to Argentine markets, as of 2006.
that this is a historical step that will
“Argentina and Venezuela have no
also set a precedent for full regional
The possibility for PDVSA and
differences regarding international
integration. We want to strengthen
ENARSA to undertake joint
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
exploration and production
“the political will of Colombia to have
was aimed at assessing current status
activities in both countries was also
Venezuela build the oil pipeline or poly-
of relations between both countries,
evaluated. Among such projects
duct, between specified production
acknowledging the work and progress
we can highlight the quantification,
sites and the Colombian Pacific area
made on transborder fuel exchange
of Orinoco Oil Belt reserves.
in order to facilitate exports from a
policies, the gas interconnection
port, with the idea of reaching Asian
project, and the Colombian-
Julio De Vido, Argentine Minister
markets. This project shall also include
Venezuelan oil pipeline or poly-duct.
of Federal Planning, Investment
fuel upgrading plants in Colombia”.
and Services, stated that joint
projects “shall be developed in the
Gas pipeline construction
works to begin in 2006
Orinoco Oil Belt and offshore and
inland in Argentina, under a sort of
The Minister and PDVSA President
exchange activity, for both national
explained “due to the investment
companies shall participate”.
required, we have decided that
the gas pipeline shall be built and
Both governments also created an
operated by Petróleos de Venezuela”
organizing committee of the investments
adding that, based on that decision,
round to be held in Buenos Aires.
engineering and work start-up
activities have been scheduled for
Open dialogue with Colombia
the first six months of 2006.
Venezuela and Colombia are
Ramírez also pointed out that project
structuring their integration, stated
completion has been set for within the
President Chávez after signing the
next 24 months. Likewise, resources
Punto Fijo Declaration and the Joint
Declaration by Venezuela and Colombia
in December 2005 in Paraguaná
to build this infrastructure where
Presidents Uribe and Chávez, reaffirm the
Ecopetrol, the Colombian oil company,
integration will of Colombia and Venezuela.
shall also be involved have been
Refining Centre, State of Falcón.
provisioned in PDVSA’s budget and
In fact, we are currently contemplating
the 2006-2030 Oil Sowing Plan.
President Chávez described the
to include a value added option
summit with Álvaro Uribe, the
through intermediate extra heavy
Approximate cost of the project
Colombian President, as “a meeting
and heavy crude oil processing
adds up to approximately 230 million
to restructure integration”.
at a given point along the oil
dollars and the gas pipeline corridor
pipeline in Colombian territory.
will go from Puerto de Ballena, in
“Beyond trends of thought, beyond
Colombia to the West Coast of the
economic fluctuations, beyond
According to the document signed
circumstantial events, we keep
by both Presidents, the work meeting
Maracaibo Lake, in Venezuela.
on, making progress despite ever
changing dynamics”, he said.
Caribbean Sea
As the Venezuelan head of State
said, “the gas pipeline is an
Guajira
Península
international project that will create
jobs and works for regional (Falcón)
development in the short term”.
Likewise, with regard to energy
integration and solidarity among
people from different countries, the
Venezuelan head of government
stated “our country is willing to
extend the Petrocaribe mechanism
to Colombia, as part of the Bolivarian
Alternative for America (ALBA)”.
Ballena
Aruba
Paraguaná
Península
Venezuela’s
Gulf
Riohacha
CRP
Punta Cardón
La Guajira
Mitare
Urumaco
Colombia
Falcón
Maracaibo
Zulia
Cabimas
Venezuela
Álvaro Uribe, the Colombian President,
stated that the meeting reiterated
The gas-pipeline between Venezuela and Colombia is part of the PDVSA Oil Sowing Plan.
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
PETROLEUM SOWING » Presidents Lula and Chávez held the ground breaking ceremony
Pernambuco Refinery makes
the South-South integration come true
This project is part of a
regional cooperation and
integration strategy based
on complementarity,
as well as on fair,
democratic, and
sovereign use of energy
resources.
Operations start-up has
From left to right: Hugo Chávez and Lula da Silva, Presidents of Venezuela and Brazil respectively,
been foreseen for 2011,
are Jose Sergio Gabrielli, Petrobras President, Jarbas Vasconcelos, Pernambuco state governor and
during the cornerstone placement of José Ignacio Abreu e Lima Refinery, in Pernambuco. With them,
Rafael Ramírez, Energy and Petroleum Minister of Venezuela.
with a 200 thousand
barrel/day capacity
Rafael Ramírez, Venezuelan Minister
PDVSA and Petrobras anticipate a
of Energy and Petroleum and PDVSA
joint investment ranging between
President; Vilma Roussef, head of the
2.5 and 3 billion dollars, and 50%
Civil House, and Jose Sergio Gabrielli,
shareholding for each company.
Petrobras President, were also present
The project’s main objective is to
n a historical event focused on
among other authorities from both
address the increasing demand for
energy integration of all South
countries. New facilities should be in
byproducts in the Northeastern region
American countries, Presidents
operation by 2011 with a 200 thousand
and to enable it to be self-supplied.
Hugo Chávez, Bolivarian Republic of
oil barrel/day (MBD) capacity, including
Venezuela, and Luiz Inácio Lula da
100 thousand barrels from a project
The “Abreu e Lima” refinery, under the
Silva, Federative Republic of Brazil,
in the Venezuelan Orinoco Oil Belt,
framework of Petrosur as a mechanism
held the cornerstone-laying ceremony
and 100 thousand barrels from the
for energy integration of the South has
of the “Jose Ignacio Abreu e Lima”
Campus basin production, in Brazil.
been designed to process heavy crude
I
refinery to be jointly built by Petróleos
de Venezuela, S.A. (PDVSA) and
Petróleo Brasileiro S.A. (Petrobras) at
Brazil Northeastern region
will be self-supplied
oils from both countries, —which have
huge reserves of this oil— and shall
be focused on maximizing naphtha,
the Suape Industrial Port Complex,
jet, diesel and liquefied petroleum
in the State of Pernambuco, Brazil.
gas (LPG) production, while reducing
exports from Brazil, mainly of the
This project is part of a regional
last two fuels mentioned above.
cooperation and integration strategy
2006-2030 Petroleum Sowing
based on complementarity, as
well as on a fair, democratic, and
sovereign use of energy resources.
Building the “Abreu e Lima” refinery
is part of the Strategic Refining
In addition to the Heads of the
Venezuelan and Brazilian Governments,
Contact with the New PDVSA • January 2006
The Pernambuco Refinery will generate more than
2,000 indirect jobs and 600 direct jobs in Venezuela.
Project, a fundamental axis for the
2006-2030 Oil Sowing Plan devised
Contact
with the New
PDVSA
last August by Hugo Chávez, the
STRATEGIC LOCATION » Venezuela navigates towards the South
Venezuelan President, to reduce
the current worldwide deficit in
such process and definitively
foster South American economic
and social development.
Orinoco
Oil Belt
Likewise, it goes hand in hand with
other plans jointly undertaken by
Carabobo
1 Block
Aguaro-Guariquito
National Park
PDVSA and Petrobras in Venezuela,
Mariscal Sucre
Project
such as the Venezuela-BrazilArgentina Gas Interconnection
Oil-pipeline in visualization
Project signed on December 9th,
Improved oil cabotage route
2005 in Uruguay, and the exploration
100 MBPD
Tanker with
Improved Marlim
(from O.O.B.).
100 MBPD
Improved Oil
and production of natural gas
Venezuela-Brazil
Gas-pipeline in visualization
Refineries
Orinoco River
reserves in the Paria Peninsula
Upgrader
under the Mariscal Sucre project.
2.000 tcf
Abreu e Lima
Refinery
Project integrated to the Belt
Brazil
Zone Campus
19° API Marlim
The new refinery will be processing
200 thousand barrels per day
of a blend of 16º API Brazilian
Marlim crude oil and an upgraded
crude oil of equivalent quality
MBPD: thousand barrels per day
tcf: trillions cubic feet
(upgraded Marlim) from a joint
PDVSA/Petrobras production
Venezuela-Brazil Business schemes
for the Orinoco Oil Belt
project in Carabobo 1 Block,
Orinoco Oil Belt. The latter shall
n
n
io ctio
at
or du
pl pro
x
E nd
a
be upgraded in Venezuela. This
g
in
ov
pr ss
Im roce
p
rt
po
ns
a
Tr
effort will create approximately
2,000 jobs in Venezuela during the
The “Abreu e Lima”
construction phase – expected
refinery will be located
to last 3 years- and 600 direct
at Suape Industrial Port
jobs during operation.
Brazil and Venezuela
become stronger
g
tin
ke
ar
M
100 MBPD
Improved
Oil
200 MBD
Extra heavy
Oil
8°-10° API
Production
Complex, in Pernambuco, Brazil
Northeastern region. This
complex will be built on 13,500
g
in
fin
Re
Improving
Process Center
Orinoco-Apure Edge
Why Pernambuco?
Abreu e Lima
Refinery
100 MBPD
Improved
Marlim
Brazil
Market
International
market
adequate port for the refinery. On
hectares comprising
the other hand, Pernambuco has
undeveloped areas as well as
In Brazil, the State of
the labor force and infrastructure
During the ground breaking
port, industrial and trade
Pernambuco has been ranked
needed to address the Refinery
ceremony for the Pernambuco
facilities. Available utilities
as the second fuel consumer
project performance needs
refinery, Hugo Chávez, President
include water supply,
in the Northeastern market,
generating no significant costs,
of the Republic of Venezuela,
transportation, communications,
just second to Bahia, and is
while showing less fragile
highlighted that Venezuela is no
power supply, security and
currently showing a significant
environmental features than
longer looking North and has
marine control, besides having
growth of oil byproducts
other areas that were assessed.
started to navigate the journey
access to the Atlantic Ocean. All
demand, particularly diesel
of integration and union with
these features make it a strategic
and LPG. The Suape industrial
The Brazilian Northeastern
the people of the South.
point to build a refining facility.
area –in operation for more
region accounts for 19% of
Petrobras has a fuel distribution
than 25 years– located in that
total demand for oil byproducts
yard in this same site.
State has enough available
in the country, and has only
surface to build the refinery, as
one refinery in the State of
“Now, Venezuela navigates toward
the South”, stated the Venezuelan
Head of Government when
The first land lot allotted for
well as –according to Brazilian
Bahia. In addition, if we take
pointing out energy integration
building the first phase of
authorities– the appropriate
into account that shipping
projects currently developed by
the refinery is located near
features for performing oil
byproducts is more expensive
Venezuela with other countries
Av. Portuaria, 4 Km. away
industrializing activities.
than processing crude oil near
such as Argentina, Uruguay,
from the Suape Port, in
Likewise, ocean conditions
serviced markets, this refinery
and Brazil, among others.
the Industrial Complex.
enable the building of an
would also bring costs down.
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
COUNTRY’S’ UNION » Strengthening Integration
Venezuela,
fifth pillar of Mercosur
During the Southerm
Common Market Summit,
PDVSA and ANCAP, the
Uruguayan Oil Company
agreed on initiating the
technical and economic
feasibility study to expand
La Teja refinery and create
Presidents reaffirm consolidation of regional block of nations.
an oil fund to support
H
various energy projects
ugo Chávez Frías, President
“For us, there is no better day for
of the Bolivarian Republic of
Venezuela to join MERCOSUR” stated
Venezuela, together with the presidents
President Hugo Chávez, who also
of Argentina, Brazil, Paraguay and
thanked the presidents of the other
Uruguay, the four South Common
member countries, Tabaré Vázquez
Market member countries (MERCOSUR
(Uruguay), Néstor Kirchner (Argentina),
for its acronym in Spanish) formalized
Luiz Inácio Lula da Silva (Brazil)
in Montevideo, Uruguay, the joining of
and Nicanor Duarte (Paraguay), for
Venezuela as 5th full member
MERCOSUR
Energy map
of this regional
Venezuela
accepting the request to join this block
made by the Venezuelan Government
integration block.
seven years ago, in December 1998.
Colombia
Population
275 million
Ecuador
Brazil
Full and Associate members
Surface
12,774 square kilometers
Full members
Peru
Associated countries
Oil production
Bolivia
5.48 million barrels per day
MERCOSUR was originally created by the four
signatory countries of the Asunción Treaty, on March
Non-associated
26th 1991: the Republic of Argentina, the Federative
Republic of Brazil, the Republic of Paraguay and the
Paraguay
Refining capacity
Eastern Republic of Uruguay.
4.9 million barrels
(including the Citgo Petroleum Corporation installations)
Oil reserves
327,000 million barrels
(including the Orinoco Oil Belt)
Coal production
23 million tons
Electric power generation
574,000 million kilowatts on hour
Contact with the New PDVSA • January 2006
Now, the Bolivarian Republic of Venezuela, backed by governments
Argentina
Uruguay
Chile
of Presidents Néstor Kirchner in Argentina, Luiz Inácio Lula da Silva
in Brazil, Nicanor Duarte in Paraguay, and Tabaré Vázquez in Uruguay, has
become a full member of this regional integration block.
Currently, MERCOSUR country members are the following:
Republic of Bolivia (1997)
Republic of Chile (1996)
Republic of Ecuador (2004)
Republic of Perú (2003)
Republic of Colombia (2004) Contact
with the New
PDVSA
On March 26th, 1991, the Republic
During the 29th MERCOSUR Presidents
To place Venezuelan coke
of Argentina, the Federative
Summit, Rafael Ramírez, Minister of
in Uruguayan markets.
Republic of Brazil, the Republic of
Energy and Petroleum and PDVSA
Paraguay and the Eastern Republic
President, and Daniel Martínez
La Teja refinery is owned by ANCAP
of Uruguay signed the Asunción
President of the National Fuel, Alcohol
and is located in the South of
Treaty, through which the South
and Portland Administration (ANCAP)
Uruguay. The expansion project
Common Market was created.
agreed on seven commitments in the
foresees installing a module with
area of energy and social projects:
enough capacity to process
MERCOSUR member countries share
50,000 barrels of oil per day.
values that find expression in their own
To initiate technical and economic
democratic and plural societies, which
feasibility studies for La Teja
The Ethanol –a carburant agent
defend fundamental freedoms, human
refinery expansion project.
of vegetable origin needed to
rights, environmental protection and
produce gasoline– manufacturing
sustainable development, and in their
To produce Ethanol in the southern
project already has 7 million dollars,
commitment to democratic consolida-
country, to be used in gasoline
contributed by Venezuela to an Oil
tion, juridical security, the fight against
production in Venezuela.
Fund created to finance ANCAP
poverty and the economic and social
energy initiatives in Uruguay.
development under equal conditions.
To purchase Uruguayan cement.
La Teja will be expanded
To provide technical assistance to
make changes needed in the current
the Venezuelan cement industry.
industrial plant located in Bella Union
These resources will be used to
The Venezuelan and Uruguayan oil
–a town in the Uruguayan Department
State Companies executed important
To create two funds, one for
of Artigas– and to install ferment-
trading agreements and created
social development, and
ing units, storage tanks, distillation
two funds, one to finance social
the other to support ethanol
columns and alcohol dehydrators.
projects and the other to support
and cement production.
ethanol and cement production.
Petrosur »
Montevideo Statement
The gas pipeline would start from
Besides this new office, PDVSA
Venezuela, go through a significant
has other offices with similar
part of Brazilian territory, first
importance in Brazil and Argentina.
to Manaos, then the North and
D
Northeastern regions, to go on
“This office means a strategic step
towards the Southern region,
under the integrationist perspective
towards Buenos Aires and,
fostered by the Bolivarian
then Montevideo. Approximate
Government”, pointed out
uring MERCOSUR summit held
Republics in the South American
cost of the project has been
Alejandro Granado, the corporation
in Montevideo, Uruguay, the
region to join this initiative that
estimated at 12 billion dollars.
Vice-President in Montevideo,
governments of Argentina, Brazil
will benefit all peoples under
and Venezuela bound themselves
Petrosur, as the energy integration
to complete the South American
platform for the region.
adding that joint projects on
Office in Uruguay
energy matters to be held between
Venezuela and Uruguay will be
gas interconnection project,
channeled through that office.
as a decisive step for regional
In order to bring forward the
integration. Presidents Néstor
project, the Ministries of Energy
Trade relations particularly energy
Kirchner, Luiz Inácio Lula da Silva,
and Petroleum of the Bolivarian
relations between Caracas and
and Hugo Chávez signed the
Republic of Venezuela; of Federal
Montevideo have become closer,
Montevideo Declaration instructing
Planning, Public Investment
through various agreements
their ministers with competency on
and Services of the Republic
including one for Venezuelan fuel
energy matters to initiate feasibility
of Argentina; and of Mines and
supply to the Southern country
studies for the South American
Energy of the Federative Republic
Gas Interconnection Project.
of Brazil will create work teams,
Petróleos de Venezuela opened
a portion of the invoice with
that will submit monthly reports
a trading office in Montevideo,
goods and services such as
about progress of the study.
Uruguay, during the 29th
cement, ethanol and cattle.
In this document, the heads of
government also invited other
that contemplates payment of
MERCOSUR Presidents Summit.
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
TRADE
» Contracts signed with 4 countries in the Caribbean Eastern Arc
Technical Supply Agreements
strengthen Petrocaribe
P
DVSA entered into six framework
These agreements were reached
agreements with Dominica,
during the Petrocaribe Technical-
Zero discounts
Belize, Saint Christopher and Nevis,
Trading Work Sessions organized by
Adolphus Lard Low, the head of
and Saint Vincent and The Grenadines
PDV Caribe, operating branch of the
Economy in Saint Vincent and the
to directly supply oil by-products to the
Agreement, as part of the negotiations
Grenadines, thanked the Government
Eastern Caribbean Arc, all under the
with representatives from various
of President Hugo Chávez and the
Petrocaribe Cooperation Agreement
signatory countries.
Venezuelan people for such initiative
signed in Puerto La Cruz, Venezuela,
as sharing their hydrocarbon resources
last June 29th and ratified through
Jamaica and Cuba had previously
bilateral agreements signed in Montego
signed supply agreements
with Caribbean countries.
Bay, Jamaica, on September 6th.
and therefore must be added
Lard Low explained that the Petrocaribe
to countries listed above.
Agreement does not foresee crude oil
BROTHERHOOD with the Caribbean
LPG to Saint Vincent and The Grenadines
PDV Caribe President; Asdrúbal
a symbol of the esteem and
related to infrastructure
Chávez, PDVSA Director and PDV
kindness of the Venezuelan
under the Petrocaribe
Caribe Vice-President, and Jesús
people”. He thanked PDVSA for its
Cooperation Agreement.
Villanueva, PDVSA Director and
effort to bring fuel in a direct way
PDV Caribe Director were present
to all the people in those islands
Asdrúbal Chávez, PDVSA Director
when the first shipment arrived.
of the Saint Vincent and The
and PDV Caribe Vice-President
Grenadines archipelago.
and Reginald Austrie, Dominica
Granado stated that the LPG
shipment delivery “is an
received the first Liquefied
authentic evidence of Petrocaribe
and social aspects related to
Petroleum Gas (LPG) shipment
implementation, as a result
the agreement, as well as about
under the Petrocaribe Agreement.
of the first agreement signed
establishing a mixed company
Last December, 7 thousand 200
in Puerto La Cruz, and is now
between PDV Caribe and the
pressurized containers (cylinders),
showing concrete results within
Dominican State company.
with 10 kilograms of LPG each
the framework of regional
arrived at Campden Park Port,
energy integration, for the
“With the arrival of this tank we
on board of the ARBV-T64
purpose of benefiting Caribbean
are activating mechanisms to
vessel owned by the Navy of the
communities”.
Bolivarian Republic of Venezuela.
Minister of Energy were present
Venezuelan Tank in Dominica
Saint Vincent and The Grenadines
and talked about legal, technical
establish a storage center for huge
With the arrival of the first fuel
fuel volumes in Dominica, due to
Ralph Goncalves, First Minister of
storage tank at Dominica from
its strategic geopolitical situation,
Alejandro Granado, refining
Saint Vincent and The Grenadines
Venezuela, Petróleos de Venezuela
and distribute from there to other
Vice-President of PDVSA and
stated “this first shipment is
started to fulfill commitments
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
Cuba
Already, 6 Caribbean
countries are receiving
Belize
Jamaica
Saint Kitts
and Nevis
oil byproducts from
Dominica
Venezuela under
Caribbean
Sea
special payment terms,
Saint Vincent and
The Grenadines
eliminating additional
Atlantic
Ocean
increases due to
Venezuela
Pacific
Ocean
intermediaries
Integration with solidarity
sales at low prices, but an oil supply
under special financing conditions. “We
The Petrocaribe agreement sets
Topics
are not receiving oil at a discount, we
forth the Venezuelan commitment to
addressed in
are rather receiving funding intended to
provide technical support as needed
these meetings included
help our economies”.
by each signatory country, in order to
technical aspects related to
materialize those precepts related to
opportunities to optimize transportation
In turn, Reginald Austrie, the Dominica
hydrocarbon supply, distribution and
costs, maritime logistics, as well as
Minister of Energy, deems that the
trade in the Caribbean, on the basis of
assessing volumes, qualities and
Petrocaribe initiative will be recorded
solidarity among people from different
prices of hydrocarbons to be supplied
by history as a foundation for energy
countries, economic complementarity
by Venezuela.
cooperation and complementarity
and fair and balanced access to
among countries.
energy resources.
islands in the eastern arc”, pointed
hydrocarbon shipments made
the complementarity in the
out PDVSA director.
under the Petrocaribe agreement.
transportation field”.
Haiti will be included
A PDVSA commission led by
Weighing approximately 33
In turn, Montero thanked the
Alejandro Granado, Refining
tonnes, the tank to store diesel
President of the Bolivarian
Vice-President and PDV Caribe
was shipped in a Venezuelan
Republic of Venezuela, Hugo
President went to Haiti to evaluate
Navy vessel last October 28th
Chávez, for the Petrocaribe
mechanisms that would allow
from El Palito refinery, in the
initiative for the benefit of the
this Caribbean country to join
State of Carabobo and arrived at
peoples of the region.
Petrocaribe, as announced by
Woodbridge Bay Port, in Dominica
Hugo Chávez, President of the
on November 2nd.
This agreement sets forth the
Bolivarian Republic of Venezuela.
The agreement was subscribed
basic outline of the agreement to
by Álvaro Montero, advisor to the
be signed by Venezuela and Cuba
The commission held meetings
Cuban Ministry of Transportation,
in the short term and intended
with the Venezuelan diplomatic
and Asdrúbal Chávez, PDVSA
to provide efficient, safe and
representation in Port au Prince
Petróleos de Venezuela S.A.
Director and PDV Marina
economic transportation to all
in order to define actions aimed
(PDVSA) and the Cuban Ministry
President, who pointed out the
Petrocaribe signatory countries.
at benefiting the Haitian people
of Transportation entered into an
importance of such agreement
integration agreement related to
“to bring greater more benefits to
The agreement foresees
supply at fair prices, under the
maritime transportation in order
the people in Caribbean countries.
using the PDVSA and Cuban
regional energy integration
to set the basis for creating a
This agreement continues the
fleets, although using vessels
strategy.
bi-national company to handle
energy integration process and
from other companies has
Cuban-Venezuelan maritime integration
with safe and reliable hydrocarbon
not been discarded.
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
OUTLINES » PDVSA changes relationships with suppliers
Social Production Companies:
a step towards 21st century socialism
S
ocial Production Companies (EPS
for their acronym in Spanish)
are economic entities devoted to the
supply of goods or services where
work has an inherent and authentic
meaning, and has not been alienated,
where there is no social discrimination
at work or regarding any kind of work,
no privileges related to hierarchical
positions, but is only a substantive
equality among all members, based on
participative and protagonistic planning
under a State or collective property
regime, or a combination of both.
Any surplus is to be distributed in the
Some part of the surplus generated by the EPS, should be distributed with equality among its members.
following order:
Petróleos de Venezuela has created the Social
1 Self-sustainability fund
Production Companies Register (REPS for its
2 Labor fund
3 Fund for Social Development
Programs
4 Fund to Promote New Social
Production Companies
5 Among all collective equity
acronym in Spanish), in substitution of the current
Contractors Auxiliary Register (RAC for its acronym
in Spanish), in order to transform production and
owners
business relations among goods and
In order to foster this type
services providers in the oil sector
of organization, Petróleos
de Venezuela has created
the Social Production
trillion 272 billion bolivars,
that is, 83% of the total. In
for its acronym in Spanish),
addition, payments made to
and production companies billed 8
cooperatives just added up to
trillion bolivars, equivalent to 66% of
which are to substitute
the current Contractors
Auxiliary Register
(RAC for its acronym
117.7 billion bolivars, only 1%
of the total amount paid by the
Corporation.
in Spanish), in order to
change production and business
work and service providers, 68 drilling
the total amount paid by the industry
that year.
EPS Register (REPS)
This is contrary to the strategy set
relations among goods and services
forth in Decree N° 2,371 issued on
As activities related to Social
providers in the oil sector.
May 13th, 2003, that 20 to 25% of the
Production Companies development
State purchasing capacity must be
represent the will of PDVSA
allotted to the Small and Medium-Sized
shareholder and Board of Directors
Companies (SMC) and to Cooperatives
to ensure a higher commitment and
In 2004, the amount paid by PDVSA to
to buy industrial works and services,
contribution to the development of
its works and service providers added
low technological complexity goods
construction, service and goods
up to 12 trillion 833.5 billion bolivars;
with a high with national integration
companies, PDVSA has created the
of which 148 companies billed 10
percentage.
new Social Production Companies
Current suppliers’ conditions
10
In 2004, of the total amount paid to
Companies Register (REPS
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
Register (REPS), abolishing the current
Contractors Auxiliary Register usually
referred to as RAC, its acronym in
Spanish.
160 participants in the First Social Production Companies Show
PDVSA boosts social economy with loans
for over Bs. 6,900 million
EPS must meet the following
President Chávez handed out the first checks in Tía Juana,
conditions:
Zulia state.
Take part in community projects
through contributions to PDVSA
PDVSA “wanted
strategy of popular redistribution
Social Fund, or providing goods
no more briefcase
of oil income.
and services.
companies, or
Contribute to community
production, distribution and service
companies’ development.
false cooperatives.
Ramírez recalled that purchases
Here, everyone
made in the country by PDVSA
must receive
in 2004 added up to 12 trillion
A total of 164 Social Production
the benefits. Anyone setting
bolivares, of which 80% was
Companies (SPC) took part in
a labor commitment with the
allotted to 148 companies. This
All other companies that would get filed
the first SPC show held in Tia
Corporation must assume a social
fact “represents a very high
in the register shall also take part in
Juana, State of Zulia, inaugurated
commitment with all the other
concentration of all goods and
the EPS program, and should meet the
by President Hugo Chávez, last
Venezuelans who did not have
service rendering activities in
following conditions:
November 27th.
the privilege of joining the oil
a group of companies” and
company”.
this is totally anti-democratic
Contribute to PDVSA Social Fund.
In the closing act of the show,
and contrary to what the New
which was opened to the public
Loans granted during of this
PDVSA is fostering: the political,
until November 30th, Rafael
show to representatives from 12
economic and social involvement
processes, under a concept based
Ramírez Minister of Energy and
Social Production Companies
of the Venezuelan people in oil
on the need to perform works,
Petroleum and state oil company
exceeded 6,906 million bolivares.
activities.
render services and/or provide
President, stated that the New
Such loans are part of the
Submit a Social offer in tender
goods that will address community
needs, in order to ensure their
harmonic and sustainable
companies registered in the REPS and
development.
shall focus on developing projects to
Financing Fund
benefit communities. Likewise, this
Taking into account that to strengthen
fund shall be managed through a
and consolidate EPSs it becomes
companies and EPSs, including
fiduciary entity set up under a trust
necessary to have an effective
support to develop systems,
contract.
mechanism to leverage this type
Develop and accompany small
technologies and establish ongoing
of companies, the creation of a
programs to help their insertion in
100 million dollar Financing Fund
the productive system.
was approved to promote them.
Set up consortiums with medium
The amount approved represents a
size companies and EPSs in order
seed capital that will allow for EPS
to make them technologically
capitalization through recoverable
stronger, thus promoting an
loans granted under special conditions.
Incremental National Added Value
and a higher involvement in fulfilling
The Vice-President of Exploration and Production, Luis
Vierma, also participated in the First EPS Showroom.
needs of the oil sector operating
areas.
Contribute to the development of
community production, distribution
infrastructure, capital assets provision,
accessing technologies, recruiting
Projects to be financed by the Fund
qualified human resources and the
will be identified by the relevant Mobile
necessary training to strengthen these
Cabinets, and further approved by the
companies until they can reach their
Executive Branch of Government.
economic autonomy and improve their
and service companies’.
Social Fund
Such loans will expedite such tasks as
overall operational efficiency, which will
The contribution to be made to the
further allow them to fulfill their liabilities
Social Fund shall be determined on
with the Fund, thus ensuring financing
the basis of a minimum percentage
for other EPS.
The EPS Social Fund is intended
of contracted amounts, as per a
to receive contributions from those
predetermined scale.
Contact with the New PDVSA • January 2006
11
Contact
with the New
PDVSA
CONVERSION » A measure leading to savings of 3 billion dollars annually
Mixed Companies to exercise
full sovereignty over oil resources
On January 1, 2006, Petróleos de Venezuela regained
sovereign control over 32 local oil fields. Given to
multinational companies in the 1990’s under the concept
of operational agreements, the conditions proved
unfavorable to the Republic
I
n keeping with the mandate of the
approved by the National Assembly in
Ministry of Energy and Petroleum,
the next three months.
on January 1, 2006, Petróleos de
Venezuela (PDVSA) recovered full
Thus, Venezuela has been able to
sovereignty over 32 oil fields which,
leave behind the terrible years of the
back in the 1990’s, had been awarded
1990’s and is once again the first
in 3 bidding rounds, and by direct
point of reference for all oil exporting
Energy and Petroleum Minister and
allocation under the concept of
countries.
PDVSA President, Rafael Ramírez.
The bad business deals of the 90’s
In synthesis, these agreements were
operations agreements.
Following a negotiation process sched-
Venezuelan Mixed Capital Companies will produce
more than 500 thousands oil barrels per day.
used to disguise bogus concessions,
uled to end on December 31, 2005,
After conducting a legal and technical
which were illegal as they had not been
19 multinational companies agreed
analysis, the Ministry of Energy and
endorsed by Congress at that time.
with PDVSA to legalize their activities
Petroleum instructed PDVSA in April
in Venezuela by converting to Mixed
2005 to review accounts of operations
In the first round (1992-1993), 3
Companies, a form of association pro-
agreements, given that these accounts
contracts were awarded; in the second
vided for in the current Hydrocarbons
presented direct losses of 250 millions
round (1993-1995), tenders were
Organic Law governing the participa-
dollars for the state-owned oil company
invited and awards granted for 11 more
tion of private capital in the petroleum
for 2004 alone.
areas; and in the third and final round
industry.
(1997), three operation agreements
The analysis also revealed that these
were added to the list.
The international oil companies signed
agreements were not in keeping with
transition agreements in which they
the 2001 Hydrocarbons Organic Law
pledge to comply with Venezuela’s
or with the previous legal framework.
The oil opening process
is now History
with Seniat regulations. Meanwhile, it
“The clauses governing fees based on
In referring to the recovery of 32 fields
should be noted that the elimination of
the volume and price of hydrocarbons
early in 2006, President Hugo Chávez
the concept of operations agreement
produced in the operation areas and
stated, “On the 1st of January, a new
will lead to net savings of 3 billion
agreed upon with the companies
development took place. Venezuela
dollars in PDVSA’s cost budget for
engaged in these areas violated the
assumed control over thirty-two
2006.
very nature of a simple service contract,
operation agreements - that is, 32 oil
which was the concept provided for in
fields. These were under the control
The Venezuelan State will have a major-
the 1975 Organic Law reserving control
of multinational companies. The
ity share of over 60 percent in the new
of the hydrocarbon industry and trade
governments of the time approved the
mixed companies after they have been
to the Venezuelan State,” declared
processes in which they were awarded.
income tax and hydrocarbon laws and
12
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
Mixed Companies
Coro
Caribbean Sea
Maracaibo
5
3
13
6
14
Caracas
8
9
7
2
4
11
12
32
21
Barcelona
San Carlos
10
17
28
20
19
15
Field
In Association with PDVSA
30
Maturín
25
24
26
31
22
1
18
16
Barinas
31
23
27
Orinoco Oil Belt
Field
In Association with PDVSA
Field
In Association with PDVSA
Petrobras
Cía. Gral. de Combustibles
Suelopetrol
Hocol
Hocol
Harvest Vinncler
Petrobras
These companies paid no royalties and,
CHRONOLOGY of the process
furthermore, any investment they made
August 17, 2005:
October 24: Petroleum
had to be returned to them in dollars.
First 13 agreements
and Energy Minister and
That is now history.”
signed: Repsol YPF
PDVSA President, Rafael
(Mene Grande,
Ramírez, swears in 32
Meanwhile, Minister Rafael Ramírez
Quiriquire and Guárico
Transition Executive
stated that the conversion process
Occidental); China
Committees responsible
“is a goal that we have achieved.” He
National Petroleum
for negotiating the
had repeatedly declared that the 500
Corporation (Caracoles
conditions under which
thousand barrels of oil being produced
and Intercampo Norte);
the Mixed Companies
on the basis of operation agreements
Hocol (B-2X.68/79 y
will be set up.
Mixed Companies
“were the most expensive barrels of our
B-2X.70/80); Harvest
national production.” He explained that
Vinncler (Monagas Sur)
December 1: Shell
The Hydrocarbons
the production cost of the agreements
and Vinncler Oil & Gas
(Urdaneta Oeste), British
Organic Law clearly
The State maintains
had reached 20 dollars per barrel
(Falcón Este); Inemaka
Petroleum (D.Z.O.
and simply provides
the principle of tax
while the cost of the country’s own
(Kaki and Maulpa);
and Boquerón) and
for the participation of
sovereignty, which
production was barely 4 dollars.
Suelopetrol (Cabimas)
Compañía General de
national and international
is expressed in the
and Open (Casma-
Combustible (Onado)
private capital in the
payment of Income
Anaco).
converted.
hydrocarbon exploration
Tax at a rate of 50
and production
percent for oil-related
activities.
“What was happening? In a clear
From left to rigth: Bernard Mommer, PDVSA’s Director;
Rafael Ramírez, Minister and President of PDVSA and
Eulogio Del Pino, PDVSA’s Director.
30 percent as a
minimum.
vision to privatize our oil industry, 500
thousand barrels of so-called marginal
September 28:
December 19: Transition
business. It is through
fields were awarded; at the time,
Agreements signed with
agreements signed
Mixed Companies which
however, these fields were producing 80
Petrobras (Acema, Mata,
with Eni (Dación), Total
have, among others, the
The State will be the
thousand barrels per day. One example
Oritupano-Leona and La
Oil & Gas (Jusepín),
following features:
absolute majority
is the Boscán Field, which was awarded
Concepción).
West Falcón Samson
directly to Chevron” Ramírez stated.
stockholder, a
Hydrocarbons (Falcón
The State maintains
status which - with
October 6: Perenco
Oeste) and Chevron (LL-
full sovereignty over
the payment of 30
With the Mixed Companies, the Ministry
agreement signed
652 y Boscán).
oil fields. Its property
percent in royalties
of Energy and Petroleum will exercise
(Ambrosio and
is not transferable.
and an Income Tax of
full sovereignty over this natural
Pedernales); Tecpetrol
December 30 2005:
The fiscal expression
50 percent - will make
resource, full jurisdictional sovereignty
(Colón) and Teikoku Oil
Repsol YPF reaches
of this right is the
it the guaranteed
and fiscal control over the production
(Guárico Oriental and
agreement with PDVSA
oil royalty which,
recipient of at least
that had been lost as a result of these
Sanvi Güere).
on transfer of its last
in this case, will
82.5 percent of the
field, Quiamare-La Ceiba.
be equivalent to
profits earned.
operational agreements.
Contact with the New PDVSA • January 2006
13
Contact
with the New
PDVSA
gas » Go-ahead given for phase B
Rafael Urdaneta Project yields
$106.8 million in bonds
With this transparent and
successful process, we are giving
The legal base for the selection
In my 20 years of experience, I
process strengthens the
have never seen such a clear and
a clear signal of the roles and spaces open
foundation of the Rafael Urdaneta Project.
transparent process. We were provided
to national and international private
We have high expectations about
with precise information on a regular basis,
capital in the development
the development of these areas
and all our questions were
of our projects
appropriately answered
Rafael Ramírez
Toshiaki Takimoto
Minister of Energy and Petroleum
Alí Moshiri
Manager of New Business
and President of
President of Chevron Exploration
and Production, Latin America
A total of six blocks in the Gulf of Venezuela were awarded by the Ministry of Energy
and Petroleum for the exploration and subsequent production of non-associated
gas. Enterprises from Brazil, Japan, Italy, Spain and Venezuela won during the
second round. The areas included in phases A and B will guarantee an annual
investment of 6 million dollars in social development projects
T
he selection process
“With this transparent
while the Petrobras International/
of companies for the
and successful process,
Teikoku Oil consortium of Brazil and
Rafael Urdaneta project,
we are giving a clear
Japan, respectively, offered 19.5 million
known as phases A and B,
signal of the roles and
dollars for the Moruy II block. However,
yielded over 106. 8 million
spaces open to national
the best offer, amounting to 34 million
dollars in bonds for the exploration
and international private capital in the
399 thousand dollars, was made by
and production of non-associated gas
development of our projects,” Ramírez
Repsol YPF/ENI Venezuela of Spain
in blocks off the Gulf of Venezuela.
stated after giving special recognition to
and Italy, respectively for the Cardón IV
In addition, the minimum exploration
the Venezuelan company Vinccler Oil &
block.
program for both phases is expected
Gas for having won the bid.
to generate some 183 million dollars in
investment.
The Cardón II and Urumaco III areas
The selection process for phase B of
were declared deserted. The amount
the project, which consists of 5 blocks
bid by the winning companies totaled
Last November 15th, Energy and
(Cardón II, Cardón IV, Castilletes NE
61 million 287 thousand dollars, from a
Petroleum Minister and PDVSA
II, Moruy II and Urumaco III), began
total of 94 million 175 thousand dollars
President, Rafael Ramírez, announced
on September 8 this year following the
for all the bids tendered.
the winners of phase B of the Project
announcement of the winners of phase A.
as Vinccler Oil & Gas, C.A., for the
Castilletes NE II block; the Petrobras
Balance
International/Teikoku Oil consortium
14
The licenses will have a duration of
30 years, and the State will be able
to participate through Petróleos
for the Moruy II area; and the ENI
The Venezuelan enterprise, Vinccler Oil
de Venezuela, with as much as 35
Venezuela/ Repsol YPF consortium for
& Gas, offered 7 million 388 thousand
percent, once the project is declared
the Cardón IV block.
dollars for the Castilletes NE II block,
commercially viable. The gas produced
Contact with the New PDVSA • January 2006
Contact
with the New
PDVSA
Falcón. Together, these blocks cover
the selection process, which helps to
an area of approximately 30 thousand
strengthen the Rafael Urdaneta Project.
square kilometers.
“I am sure that we will be able to find
large amounts of gas in the Gulf of
In keeping with the law
Venezuela. We have high expectations
about the development of these areas.”
Juan Francisco Clérico, President
of Vinccler Oil & Gas, said that the
After the Phase B results, the President
selection process was in keeping with
of Chevron Exploration and Production
the law and that his company felt the
Latin America, Ali Moshiri, stated that
prospects of finding large reserves of
“In my 20 years of experience I haven’t
gas, which would allow it to supply the
seen a process so transparent and
local market and earmark surpluses
clear. PDVSA gave us the necessary
for export, was promising. “The first
information and all of our questions
will be used primarily to meet local
phase of the minimum program
were timely answered”.
demand, with the surplus earmarked
involves developing 500 kilometers of
for export, as set out in the organic law
2D seismic and 300 kilometers of 3D
governing gaseous hydrocarbons.
seismic. Later on, we will be continuing
The president of the Venezuela Bolivarian
Republic, during the awarding of licenses for A
Phase in Paraguaná, Falcón state.
with the second and third phases where
In phase A of the project, 3 exploration
we plan to drill 2 preliminary wells.”
blocks were awarded to the Russian
and American enterprises Gazprom
Meanwhile, Gerson Faría Fernandes,
(Urumaco I y II) and Chevron (Cardón
general manager of Petrobras, pointed
III). The winning bids received in
out that the participation of the Brazil-
both phases A and B of the project
ian oil company in the Rafael Urdaneta
amounted to 106. 8 million dollars, while
Project was part of a process aimed at
the overall amount offered was 150
complementing the integration agree-
million 375 thousand dollars.
ments between Venezuela and Brazil.
Energy and Petroleum Minister and President
of PDVSA, Rafael Ramírez, presented the
certificates to the winning companies of B Phase.
“We have very high expectations as to
Development of the Rafael Urdaneta
the presence of large deposits of hydro-
field is part of the DeltaCaribe Project,
carbons in the area,” he noted.
one of the main axes of the 2006-2030
Plan Siembra Petrolera – or Petroleum
Toshiaki Takimoto, Manager of New
Sowing Plan – and consists of 29
Business, Teikoku Oil, underscored
blocks, 18 of which are in the Gulf of
his satisfaction with the legal basis of
Venezuela and 11 in the north-east
Cardón IV
Repsol YPF/Eni
Castillete NE II
Vinccler
Cardón III
Chevron
Urumaco I
Gazprom
Urumaco II
Gazprom
A Phase
B Phase
Moruy II
Petrobras/Teikoku
Granted blocks in 2005
Falcón state
Contact with the New PDVSA • January 2006
15
Contact
with the New
PDVSA
gas » Supply for the petrochemical industry guaranteed
East and West interconnected
by the ICO Project
The interconnection of gas
transportation systems will
help strengthen the social,
economic and industrial
development of these two
Venezuelan regions
T
he gaseous hydrocarbons project
Venezuela. Achieving this goal
areas, as well as foster Latin American
envisaged in the government’s
inevitably calls for the acceleration
and Caribbean integration.
Plan Siembra Petrolera –or Petroleum
of every land-based and off-shore
Sowing Plan– is a spearhead for
gas exploration and production
The ICO project, which involves
meeting the demand for gas in
project envisaged, as well as the
interconnecting Venezuela’s Central-
modernization of the Anaco area in
Eastern (Anaco-Barquisimeto) gas
Anzoátegui state as a gas producer,
transportation systems with that of the
and the development of gas reserves
West (Ulé-Amuay), is one of the major
in the country’s central region.
developments being undertaken by
La Florida Station, Falcón state
PDVSA Gas to guarantee the supply of
During the 2006-2012 period, PDVSA
gas to the Paraguaná Refinig Center, to
plans to invest a total of 16 thousand
partially meet demand in the Western
780 million dollars in major gas
part of the country, foster economic
projects. This will help meet domestic
growth in the pipeline’s service areas,
demand, contribute to build the
provide liquids for export and, in the
country’s new social, economic and
long term, earmark supplies of gas for
production model, maximize and
Colombia and Central America.
boost the value of gas resources,
Paraguaná
CRP
and encourage the endogenous and
ICO is a project intended to support
sustainable development of the service
and strengthen the social and industrial
La Vela
Venezuela’s
Gulf
Caribbean Front
Río Seco
Caracas
Jose
Ulé
Arichuna
Barquisimeto
Pto. La Cruz
Morón
Anaco
New compression plants
Los Morros
New gas-pipeline segment completed
16
Gas-pipeline under construction
Contact with the New PDVSA • January 2006
Guico
Altagracia
Morichal
Pto. Ordaz
Contact
with the New
PDVSA
development of Venezuela’s Central-
EARLY victory
Western region by means of domestic
service area. This highlights the
distribution networks operated by third
social responsability aspects
parties and by ensuring the ongoing
and excellent performance of
availability of supplies. The project also
the project with regard to the
seeks to cover the needs of the power
environment, health, education,
system of the national petrochemical
local economy, road systems
industry.
and services, as well as cultural
During the second quarter of 2004,
51 miles of pipeline are ready, from La Vela to Río Seco, Falcón state.
heritage.
work was started on this segment of the
The start-up of the first 82
has been completed. Plans are
In Altagracia de Orituco, Villa
project in the Miranda municipality of
kilometers of gas pipeline between
underway to place this segment
de Cura and Río Seco the needs
Falcón state under the coordination of
Río Seco and the La Vela Station
into operation by November 2005.
and potential of the community
PDVSA Gas and with the participation
of the Central-Eastern and
Meanwhile, subsequent segments
are being analyzed with a view
of the national industry and of the
Western Interconnection Project
are reaching as far Morón.
to promoting various core
communities located in the vicinity of
(ICO) represents an early victory
the project.
with these initial volumes of gas
endogenous development areas.
Compression plants
Rescuing the past
being supplied to the Paraguaná
The project includes 300 kilometers of
Refining Center (CRP).
30 and 36 inch diameter pipe, to be
Morón: Central-coastal region
of Carabobo state.
With the support of PDVSA
installed through the north of Carabobo,
Thus, the ICO Project, which
Los Morros: Located on the
Gas, the Venezuelan Institute
Falcón and Yaracuy states. In addition,
seeks to link Anaco-Barquisimeto,
outskirts of Villa de Cura,
for Scientific Research (IVIC),
three compressor plants will be built in
Ulé-Amuay, CRP and the Western
Aragua state.
the Francisco de Miranda
Morón in Carabobo state; San Juan de
region with this gas pipeline,
Altagracia de Orituco: North-
Experimental University (UNEFM),
los Morros and Altagracia de Orituco, in
is already proving its worth by
eastern tip of Guárico state.
through the Archaeological,
Guárico state.
connecting the gas producing
Anthropological and
area of the fields of East Falcón by
Paleontological Research Center,
means of the network of stations
and the Cultural Heritage Institute
82 Km of pipeline completed
of Río Seco, La Florida, Agua Viva,
are engaged in activities aimed
The first stretch consists of 82
Coro and La Vela, which are all set
at rescuing the archaeological
kilometers of 30 and 36-inch pipe
to start operation.
heritage of the area where the ICO
running from La Vela to Río Seco, in
project is being developed.
Early start-up
Social Development
borders with Zulia, Lara and Carabobo.
The Río Seco-La Vela stretch,
The ICO Project has implemented
The work includes two receiving-
which transports gas coming
a Social Investment Plan aimed
transfer trap stations and three
from the fields of East Falcón, by
at fostering the socio-economic
separation stations, to handle between
means of the La Vela Vinccler gas
integration and development
40 and 100 million standard cubic feet
receiving-transferring station to
of the communities located in
of gas per day from East Falcón fields.
the Paraguaná Refining Center,
the vicinity of the gas pipeline
the Miranda municipality, to SouthEast Coro in Falcón state, a region that
Laying the pipeline
Bowl found in XIX century
settlements in Falcón.
The ICO is a highly important project
for the national oil industry, because
it will help overcome the gas deficit
of the western region and provide
higher operating reliability to the
Paraguaná Refining Center.
Atlantic Front
Pipeline diameter:
30 and 36 inches
Contact with the New PDVSA • January 2006
17
Contact
with the New
PDVSA
PDVSA in figures 2005*
Petrotips
Production on the road to recovery
in Venezuela’s Western region
5 million barrels for the Asian market
Proven Reserves
Crude
For the first time ever in the history
80 Bn Barrels
150.4 tcf
Gas
Venezuela’s production capacity
PDVSA currently produces 1,158,800
of the national oil industry, PDVSA
barrels of crude a day and a little over
simultaneously sent three shipments
Crude
1.1 billion cubic feet of gas in the
of 5,354,756 barrels of crude and
Gas
6.9 Bn cf
Western region of Venezuela. These
fuel to China and Singapore in three
figures confirm the gradual recovery
VLCC (Very Large Crude Carriers).
LNG
0.25 m BPD
3.9 m BPD
Refining capacity
of that area which had a deficit of 100
thousand barrels of oil as compared
As part of the country’s market
In Venezuela
1.3 m BPD
to corporate estimates for this year.
diversification trade policy, the VLCC
Abroad
2.0 m BPD
Total
3.3 m BPD
tankers, Great Lady and Elizabeth
Maersk, departed for Singapore from
Venezuela’s proven reserves of
crude and gas on the rise
PDVSA terminals in the Bahamas and
Global income
Bonaire, respectively, with shipments
85.6 Bn US$
of fuel oil, while the “World Lion” left for
China from PDVSA’s terminal in Saint
Lucia, with a cargo of BCF 17 crude.
* Preliminaries numbers
Glossary
m: Millions
cf: Cubic feet
BPD: barrels per day
Financial statement for 2003
submitted to SEC
MBD: Millions of barrels per day
m cf pd: Millions of cubic feet per day
Bn US$: Billions US dollars
PDVSA President, Rafael Ramírez,
Quote of the month
recently announced an increase
in the country’s proven reserves of
“
crude and natural gas. He pointed
out that crude reserves had risen from
the example set by Venezuela in
77 billion to a little over 80.5 billion
helping its most needy customers.
barrels and recalled that, thanks to the
quantification and certification process
Petróleos de Venezuela (PDVSA)
Massachusetts recognizes
of the Orinoco Oil Belt reserves, 235
and its affiliate, PDVSA Finance,
billion more barrels will be added to
Ltd, submitted to the US Securities
the specific benefit from the
this total. Ramírez went on to say that
and Exchange Commission (SEC)
proven gas reserves have climbed
the 20-F documents, which include
from 150 trillion to 151.4 trillion cubic
the audited financial statements for
feet, an amount that is expected to rise
the year 2003, in keeping with the
by another 100 trillion cubic feet given
United States Generally Accepted
the development of off-shore reserves.
Accounting Principles (US GAAP).
OPERATION
INDICATORS
Annualized average 2005
18
Oil companies should follow
CRUDE
3,3
m b/d
Contact with the New PDVSA • January 2006
Venezuelan government and
applauds its generosity. Thank you
very much Venezuela
The Boston Globe
”
Editorial, November 23, 2005,
on the beginning of low price diesel
deliveries to US communities.
GAS
REFINING (Ven.)
EXPORTS
EXPORT BASKET
bn cu ft
(Venezuela/Isla
Circuit)
m b/d
per barrel
6,9
1,2 m b/d
2,3
$ 45,39
Contact
with the New
PDVSA
RECOGNITION » Second most reliable institution in Venezuela
PDVSA: the world’s third leading oil company
P
etróleos de Venezuela (PDVSA)
companies in the world, and is
rose to third position among
surpassed only by Saudi
the world’s 50 leading oil companies,
Aramco of Saudi Arabia and
according to an analysis conducted by
ExxonMobil of the United
the specialized publication, Petroleum
States. Thanks to the devotion
Intelligence Weekly, in its December
and perseverance of our
2005 issue.
workers and to the strength and
excellence of PDVSA, the
This ranking is based on technical
magazine Petroleum
criteria, such as volume of reserves,
Intelligence Weekly has ranked
production of crude and gas, refining
our enterprise among the
capacity, and net sales and income.
world’s three leading oil
companies.”
The positive image of PDVSA is
Top ten
Companies
2005 2004
Saudi Aramco
1
Exxon Mobil
2
1
2
PDVSA
3
4
NIOC
4
3
BP
5
5
Shell
6
5
Total
7
8
Chevron
8
7
Pemex
9
9
PetroChina
9
10
Source: PIW
therefore being acknowledged both at
Ramírez pointed out that
national level and in the rigorous
this information is vital to PDVSA,
Likewise, PDVSA is the second
analyses conducted by foreign
particularly in the wake of the
organization in terms of image and
specialized media.
oil sabotage. “The new PDVSA
popular acceptance in Venezuela.
emerges as a spiritually revitalized
According to a study made by
Energy and Petroleum Minister and
institution with a strengthened
Instituto Venezolano de Análisis
PDVSA President, Rafael Ramírez,
team of workers who have made
de Datos, 80% of Venezuelans
declared, “Petróleos de Venezuela
extraordinary efforts to ensure the
assign a high level of acceptance
ranks third among the 50 oil
recovery of the company’s activities.”
to the National Oil Industry.
TO DIVERSIfY MARKETS » Enterprises sign Memorandum of Understanding
Nynäs evaluates possibility of raising
production of specialty crude oil
P
Nynäs, a 50/50 partnership between PDVSA and Neste Oil of Finland,
company’s facilities for the purpose of
has interests in three specialized refineries: Nynäshamn and Gothenburg,
beginning the joint project listed in the
in Sweden, and Dundee, in Scotland
etróleos de Venezuela and Nynäs
Petroleum held a workshop at the
Memorandum of Understanding signed
by both companies. The memorandum
contemplates evaluating the country’s
The Memorandum of Understanding
specialty lubricants and asphalt. The
reserves and raising oil production,
provides for a one-year survey of the
Western Division would benefit through
primarily with a view to meeting the
Tierra Este Heavy Crude Exploitation
the rapid inclusion of technology for the
energy needs of Asian and European
Unit along the Eastern coast of Zulia
production targets set.
markets, which are eager consumers of
state to determine the possibility of
specialty crudes.
boosting production of hydrocarbons
If the joint project proves to be
which, because of their composition,
successful, a joint venture will be set
The event was attended by
yield higher quality in the production of
up through CVP to produce and market
representatives of the Venezuelan
asphalt and lubricants.
specialty crude oil for the Asian
Petroleum Corporation (CVP) and
markets, particularly China. Information
Intevep, both subsidiaries of PDVSA
In this joint PDVSA and Nynäs effort,
published about opportunities in China
and by experts in the areas of Trade
the Venezuelan state-owned company
report the construction of
and Supply and of Western Exploration
would contribute crude reserves while
approximately 1.8 million kilometers of
and Production, which is responsible
Nynäs, which is headquartered in
roadway over a five-year period, an
for the so-called Tierra Este Heavy
Sweden, would provide advanced
effort which will require significant
Crude Exploitation Unit.
technical know-how in the areas of
amounts of asphalt.
Contact with the New PDVSA • January 2006
19
Contact
with the New
PDVSA
COOPERATION » Members of United States Congress urge oil companies to follow Venezuela’s example
CITGO supplies fuel at lower
prices to native Americans
What we want to do is to sell
The expansion of this program
directly to households without
helps reaffirm Venezuela’s
the use of intermediaries,
commitment to the neediest
particularly now in winter
sectors of American society
Hugo Chávez
Rafael Ramírez
Republic of Venezuela
and President of
President of the Bolivarian
Minister of Energy and Petroleum
September 17, 2005,
during a visit to the Bronx,
New York
In November 2005, the Venezuelan
of the initiative, rules out the possibility
government started an assistance
that it may have been used for political
program in the state of Massachusetts
reasons and that further states that
and plans to begin a similar
“CITGO was the only oil company that
he initiative undertaken by
program in the Bronx, New York,
readily provided this kind of assistance,
President Hugo Chávez of the
in December. Subsequently, the
which would be gratefully accepted
Bolivarian Republic of Venezuela
initiative could spread to other
from any other oil company.”
to directly supply fuel at low prices
states, such as Delaware, Vermont,
to poor communities in the United
Connecticut and Pennsylvania.
Another 7 millions 988 thousands 587 gallons of
heating oil will be distributed in the State of Maine,
United States of America.
T
States continues to be a reality.
CITGO Petroleum Corporation, the
10 Massachusetts congressmen signed
Venezuelan example
the exhortation document.
US-based affiliate of Petróleos de
Venezuela, signed an agreement
The Massachusetts
with the Maine Governor’s Office
delegations of
to supply 48 thousand low-income
the US Congress
families with 8 million gallons of
sent a letter last
heating fuel –some 30 million 240
December 19
thousand liters– with a 40 percent
urging companies
discount on the international price.
to follow the example
set by Venezuela’s
This humanitarian program, which
CITGO Petroleum
also includes assistance in the form
Corporation by
of 900 thousand gallons supplied
supplying heating fuel
to the Penobscot, Passamaquoddy,
at affordable prices
Houlton and Mic Mac native American
to poor communities
tribes, as well as 120 thousand
in the United States.
gallons to 40 shelters for the poor
in the state of Maine, accounts for a
The document –signed by
donation of 5.5 million dollars from
the Congressmen– defends
CITGO Petroleum Corporation.
the humanitarian purposes
Contact with the New PDVSA is a Petróleos de Venezuela, S. A. publication Public Affairs Corporate Management Unit.
Caracas, Venezuela. Fax: + 58 + (212) 708.44.60. For questions & suggestions: Daniel Cortez, Communications Manager • e-mail: cortezd@pdvsa.com
20
Graphic Design: FIDES Imagen, C.A. Photography: PDVSA archive. Legal Deposit: If13820053502083.
Contact with the New PDVSA • January 2006
This publication may also be perused at www.pdvsa.com