Venezuela seals biggest oil deals under Chavez

CARACAS,  (Reuters) – Venezuela yesterday awarded  the largest oil investment of President Hugo Chavez’s 11-year  rule, drawing tens of billions of dollars of  much-needed foreign finance to the Orinoco Belt just three  years after the leftist leader nationalized operations there.

U.S.-based Chevron and Spain’s Repsol led groups that will  tap into the OPEC member’s 100-plus billion barrels of  reserves. Oil giants are eager to replenish waning crude  reserves that are increasingly under control of producer  nations. Caracas even softened some of its fiscal terms. Falling oil  prices have forced Venezuela and other producer nations to seek  partnerships from companies they marginalized during a  five-year commodities boom.

“This international investment is absolutely necessary for  us, we could not develop the Orinoco Belt alone,” Chavez told  oil company officials during a ceremony in the Miraflores  presidential palace.

“This is mutually beneficial. You are here because you need  to be here. These are relationships of equals, of friendship.”

The Carabobo oil tender includes three projects slated to  produce 1.2 million barrels per day following years of slumping  oil production in the OPEC nation. The new facilities may not  do much to increase the country’s total exports due to  declining output at older fields.

Repsol will take 11 percent in its project, the same stake  as consortium partners Petronas of Malaysia and ONCC of India.  PDVSA will take 60 percent, with two other Indian companies  taking the remainder, a Repsol official said.

Chevron will lead a second project along with consortium  partners that include Japan’s Jogmec, Mitsubishi, and Inpex,  plus Venezuela’s Suelopetrol.