Chavez: Orinoco Socialist Project must become in the engine to develop the country

Caracas, May 13. ABN.- “The Orinoco Socialist Project goes well beyond oil. This integral project is located in the geographical center of the country, over the Orinoco River. This entire integral socialist plan must become the most significant engine for a comprehensive development of the entire territory and Venezuelan population.”

The statements were made by Chavez after attending the ceremony were the two companies that will operate in the Carabobo Block of the Orinoco Oil Belt were created.

The event took place in the Simon Bolivar Hall of the Venezuelan state-run oil company PDVSA headquarter, where agreements were endorsed with oil companies from India, Japan, Malaysia, Spain and the United States for the creation of the joint ventures Petrocarabobo and Petroindependencia for an starting investment of 40 billion dollars.

“Currently, with the signing of these agreements, we are fully exercising our independence without being subjugated by any foreign power,” Chavez emphasized.

Through a decree published on May 7, 2010, the Government of Venezuela authorized the alliance between the Venezuelan Petroleum Corporation (CVP), Chevron Carabobo Holdings (U.S.A.), Japan Carabobo (Japan) and Suelopetrol Internacional (Venezuela).

The joint venture created among them will be denominated Petroindependencia. The shares will be divided as follows: CVP, 60%; Chevron, 34%; Japan Carabobo 5%; and Suelopetrol 1%.

Likewise, the same date, the joint venture Petrocarabobo was created between CVP, Repsol Exploracion (España), PC Venezuela, Petrocarabobo Ganga, and Indoil Netherlands (India). The shares are split as follows: CVP, 60%; Repsol, 11%; PC Venezuela, 11%; Petrocarabobo Ganga, 11%; and Indoil, 7%.

The investment of each company will be 12 billion dollars and it is expected they will reach an early production of about 50,000 barrels per day each by 2012. For such purpose, the construction of new facilities such as an oil improver, a production operative center and an oil pipeline have already begun.

The goal is that by 2016, both companies will produce around 400,000 barrels of oil per day after the construction of the oil improver plants.

Furthermore, Venezuela will receive a bond of $ 1.5bn from each company. In addition, both companies agreed on granting a credit to PDVSA for $ 1bn.

The President of Venezuela Hugo Chavez said the country is entering into a new oil century that will contrast with country’s oil history; therefore, he made a call to Venezuelans to compare both periods and be aware of it.

“We can say now that the Venezuelan oil project is starting over solid grounds with a philosophical conception, and a political and social ideological orientation in harmony. We are not going to repeat that terrible history of the 20th century,” Chavez underscored.

Production growth to come from the Orinoco Oil Belt

Rafael Ramirez, energy and oil minister and president of PDVSA, was also present at the ceremony. He was in charge of informing about the progress achieved in the projects and production estimations.

Ramirez stated that by the end of 2015, oil production in Venezuela will reach 4.15 million barrels per day; that is, one million more than the current production. Likewise, he said that by 2016, Government expects production will be over 5 million barrels per day and over 6 million barrels in 2021.

The oil minister explained that the progress achieved on oil projects has been possible thanks to the implementation of a completely sovereign policy, allowing a fiscal adjustment on exploitation and production in the framework of the Organic Law on Hydrocarbons and the governmental Oil Sowing Plan.

The Orinoco Oil Belt has been split into 31 blocks, in which more than 27 companies from 21 countries are working jointly with Venezuela to contribute with country’s development.

Ramirez recalled that when the process to choose the partners for the Carabobo Block began, some tried to interfere into the Venezuelan oil policy through international competition.

“The success we have achieved in Carabobo Blocks ratifies our oil policy and the viability that we have established for the development of these projects,” he underscored.

On May 7 the Ministry of People’s Power for Energy and Petroleum published in the Official Gazette the creation of these two joint ventures that will be comprised by PDVSA and the transnational companies from Japan, India, Malaysia, the United States and Spain, aimed at exploiting hydrocarbons at the Orinoco Oil Belt.


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