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NEWS & COMMENTARY 2008 SPEAKERS 2007 2006 2005

Tuesday, July 25, 2006

Buenos Aires, Caracas ink $4B oil deal

Argentina and Venezuela secured a $4 billion agreement last week to advance oil exploration efforts on the Orinoco Belt.

"The agreement will allow Argentina to increase by 50 percent its oil supplies to the local market," Julio de Vido, federal planning minister, told Argentine news agency Telam.

Under the agreement, Venezuelan Petroleum SA, or PDVSA, will own 51 percent of the field, while Argentina's Enarsa, or Argentine Energy Inc., and Uruguay's ANCAP, or National Administration of Fuels, Alcohol and Portland Cement, will contribute 50 percent of the investment in proportions that are yet to be defined.

De Vido said Argentina is looking to attract investment from Argentine companies such as Tecpetrol and Pluspetrol, which already operate in the Venezuelan market, in the project.

"These companies will come in as subcontractors for Enarsa and will seek out the necessary funding volumes, but the holder [of the concession] for the area is Enarsa and it will also be the one that decides how to employ the resources," he said.

"The project will demand an investment of $4 billion, $2 billion of which will be contributed by Venezuela, which holds 50 percent plus one of the field's equity," De Vido added.

The project will help boost output and channel the crude to the local market, which is currently experiencing growth.
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