Daily Journal (South America): Three companies move towards joint ventures: “Shell hopes to skip the transitory contract to sign a “definitive” joint venture contract by the end of the year, Shell Venezuela president Sean Rooney said on Thursday. He called negotiations “well-advanced.”: Friday 7 October 2005
CUMANA – The government signed five more transitory contracts on Thursday with France’s Perenco, Japan’s Teikoku and Venezuela’s Tecpetrol.
The contracts are the first step towards new joint ventures that the government has demanded companies sign by the end of the year. Twelve of the 22 private companies operating in Venezuela have now signed transitory contracts for 22 of the total 32 service agreements. Tecpetrol signed a contract for its Colón field, Perenco signed for its Ambrosio and Pedernales fields, and Teikoku signed for its Guárico Oriental and Sanvi Güere fields.
The largest companies operating in Venezuela – including Shell, Chevron, BP and Total – have not yet signed transitory agreements.
President Hugo Chávez said on Sunday that all companies were accepting new contracts except for a “certain European company.”
But directors for state oil company Petróleos de Venezuela (PDVSA) later denied that Chávez was referring a specific company.
Shell hopes to skip the transitory contract to sign a “definitive” joint venture contract by the end of the year, Shell Venezuela president Sean Rooney said on Thursday. He called negotiations “well-advanced.”
Ali Moshiri, president of Chevron’s Latin American operations, said on Tuesday that the company was open to various contract terms under new joint venture arrangements as long as shareholder value was not lost. “We don’t care what kind of contract it is as long as we retain the value,” he said.
Directors of large and small companies have said they have not yet seen the government’s contract proposal for joint ventures.
PDVSA director Eulogio Del Pino said Tuesday that the government would name in the coming weeks “executive transitory committees” to govern and set the budgets for each field while joint ventures are being formed. The committees will be comprised of three PDVSA directors and only two private company representatives, he said. “The decisions are already made…(the companies) have all been informed that we’re going to do this and they see it in a good light,” he said.
Del Pino also said PDVSA would raise the total production of the 32 fields by 30,000 to 50,000 barrels per day (bpd) from its current 550,000 bpd once joint ventures were formed.
By Jens Erik Gould
Daily Journal Staff
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