Putin Promises Venezuela First-Rate Oil Technology

In the latest show of goodwill between the Russian-Venezuelan alliance, Prime Minister Vladimir Putin has pledged splendid Russian oil technology for Venezuela's oil fields.

Russia will use the most modern oil extraction and processing technology if it wins access to Venezuela's oil deposits, Prime Minister Vladimir Putin told a Venezuelan official delegation on Tuesday.

Venezuela's state oil company PDVSA and a consortium of Russian firms expect next month to present a joint venture that aims to develop the Junin 6 block in the Orinoco oil belt, which Venezuela says has the world's largest hydrocarbon reserves.

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"If we will work in Venezuela and realise all our plans, the technology and equipment which will be used in Venezuela will be even more modern," Putin said.

"The Russian companies will use the latest technology available in global markets," Putin said.

A formal contract to jointly develop the Junin 6 block with an estimated production capacity of 200,000 barrels per day should be signed before the end of the year.

- Brewskie

Venezuelan Block May Hold 6 Billion Barrels

A Venezuelan oil block, Junin 7, is being studied for resource potential; it may hold 6 billion barrels of recoverable reserves.

A Venezuelan oil block being studied by Petroleos de Venezuela SA, or PdVSA, and Spain's Repsol YPF SA has up to 6 billion barrels of recoverable reserves, and production at the site could begin by 2012, Venezuelan officials said Wednesday.

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The so-called Junin 7 block, Chavez said, will be developed by a joint Venezuelan-Spanish company, and it will produce up to 200,000 barrels of crude a day. It will require upgrading facilities to improve the tar-like crude, he added.

PdVSA and Repsol agreed to start working together on Junin 7, located in the Orinoco oil belt in eastern Venezuela, in 2005. The Orinoco area is considered to be one of the main reserves of heavy and extra heavy crude in the world.

Venezuelan Oil Minister Rafael Ramirez said the studies on Junin 7 could be finished this year. Once the joint-venture company is approved sometime next year, production could begin two years after that, he said.

Brewskie comment: Great, Hugo, your country found more oil. Now why don't your let your oil companies fill their vital posts with skilled oil personnel, rather than your sycophantic thugs. Oil is the lifeblood of your economy, you don't have a supply problem, or any difficulty finding oil. Have you figured out why production is around 2 mbpd, down from 3.5 mbpd before you entered power?

- Brewskie

Hugo Chavez to Oil Workers: Socialism or "Death"

South America's latter-day reactionary, the Guevara-wannabe Hugo Chavez, has offered this ultimatum to Venezuela's oil workers: take up the brotherhood of socialism, or become leeches in the streets (link).

Employees of oil companies in Venezuela have protested against an ultimatum by President Hugo Chávez's government to embrace the socialist revolution or face the sack.

Hundreds of workers picketed a refinery yesterday and said they would mobilise next week to challenge the politicisation of the state oil company, PDVSA.

The unrest followed a government warning this week that employees would be suspected of subversion unless they joined pro-Chávez trade unions and community groups.

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The minister said the nationalised oil industry, which drives Venezuela's economy, must advance the president's radical agenda. "The oligarchy has to fear us, because we hate the oligarchy.

PDVSA will be here at the forefront of the revolution under the leadership of Commander Chávez." Oligarchy is government shorthand for opponents.

The minister, who doubles up as head of the oil company and is a close ally of the president, added that he would not negotiate a collective labour
contract "with any enemy of Chávez".

Union leaders condemned the comments as an attack on workers' political rights and said they would march in protest.

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The oil industry has been at the heart of Venezuela's transformation under Chávez since he defeated a strike by PDVSA workers in 2002-03. Thousands of employees were sacked and replaced with government supporters, who swelled the payroll to 80,000.

To bypass inefficient ministries, Chávez entrusted the company with an operating income of $126bn (£77bn), with multiple tasks such as adult education, food distribution and bicycle manufacturing.

But production has slumped by a quarter and after prices tumbled from last year's peak and the company, once an Opec powerhouse, has struggled to pay creditors and employees who were absorbed by PDVSA after recent state takeovers of private oil contractors.

It's worth noting that Venezuela's oil production is expected to drop another 9% this year. Since Hugo Chavez taking office, the South America country's oil production has gone from 3.2 mbpd (during the late nineties, when oil was dirt cheap), to 2.4 mbpd in 2008.

- Brewskie

Russia to Help Develop Orinico Belt

Venezuela and five Russian oil companies have signed an agreement to develop Orinoco Belt. Considering "Caesar Chavez's" manhandling of the nation's oil industry has dropped production down to 2.15 mbpd, we'll see how this pans out.

Venezuela agreed to work with a group of five Russian oil companies including Rosneft and Lukoil to create an oil joint venture in areas of the country’s Orinoco Belt, according to an accord published today.

The venture will work in the central and northern parts of the Carabobo 1 Block, according to an agreement signed 26 November and printed today in the Official Gazette, the formal record of Venezuelan government actions.

The accord says Russian National Oil Consortium, or Consorcio Ruso, will be a partner with Venezuela, said a Bloomberg report.

Consorcio Ruso was formed last year to work in Venezuelan oilfields and includes Rosneft, Surgutneftegaz, Gazprom, Lukoil, and TNK-BP.

Venezuela is auctioning minority stakes in the same sections of the Carabobo 1 Block.
Nineteen companies, including Consorcio Ruso, paid $2 million each for data on three proposed projects, one of which would pump 400,000 barrels per day from the same areas described in the treaty.

The accord does not mention the auction.

Other companies that may bid include Chevron, BP and Shell.

- Brewskie

Japan Throws Chavez a Socialist Golden Parachute

It's all about oil and natural gas today, folks; Japan throw Venezuela a $33.5 billion bone...

Japan will invest $33.5 billion in Venezuela, mostly in oil, natural-gas and chemical projects, President Hugo Chavez said at the end of a state visit.

Investments from the Asian nation include $10 billion within five years in liquefied natural gas, $8 billion in petrochemicals, $1.5 billion in refining and $4 billion in a joint-project finance fund, Chavez said, according to an e- mailed statement sent by his press office. Chavez didn’t specify where the remaining $10 billion would be invested, according to the statement.

Chavez is on a tour to secure energy investments after declining oil prices forced him to cut government spending in March. He met with Iranian President Mahmoud Ahmadinejad last week and will travel to China after concluding a two-day visit to Japan today, where he met with Prime Minster Taro Aso.

Venezuela secured $8 billion of investment in its Orinoco oil belt over five years from Japanese companies, Chavez told reporters in Tokyo today. South America’s biggest oil exporter wants to sell more to Japan and China and diversify away from its biggest overseas market, the U.S., he said.

Hugo has better opinion of Barrack...

Chavez, a long-time critic of former U.S. President George W. Bush, praised president Barack Obama’s desire to end global conflicts and said it may be possible to work together with his administration. Chavez, who last month called Obama an “ignoramus,” today said the first African-American U.S. president was “blacker” than former U.S. Secretary of State Colin Powell.

- Brewskie