Business News Americas: Shell to maintain Urdaneta production at 50kb/d under new JV – Venezuela: “Shell sees a smooth transition from its status as operator to one of minority partner…”: Friday December 16, 2005

(BNamericas.com) - Anglo-Dutch oil major Shell expects to maintain its current level of crude production at the Urdaneta Oeste field in western Venezuela's Lake Maracaibo area under a new joint venture agreement with state oil firm PDVSA, the president of Shell's Venezuelan unit, Sean Rooney, told BNamericas.

Production will remain at "more or less" the present level of 50,000 barrels a day until at least the end of 2006, he said.

Shell sees a smooth transition from its status as operator to one of minority partner in a JV dominated by PDVSA, Rooney said. "We are working with the transitional committee on the drilling program and planning for 2006." Venezuela's government announced earlier this year that all private operators in 32 such agreements would have to migrate to the new JVs by December 31 or face having their assets seized.

Shell signed a preliminary agreement to migrate to the new JV on December 31.

As part of the migration agreement, PDVSA insisted in appointing a steering entity, the transitional committee, for each of the new JVs. Rooney said he was "optimistic" about the transition. "We have worked in a very professional manner to develop the best investment program for next year and the best transition from contractor to partner." Shell also sells associated natural gas from Urdaneta Oeste to PDVSA Gas, and "we have enough left to generate our own electricity and to operate the gas lift system," Rooney added.

He said there is an ongoing E&P campaign on the field, to maintain the current production level, adding there is currently one rig drilling on the field. - (BNamericas.com)

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