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Venezuela sees production at Perla gas field delayed until 2013

15 Jun 2012

Venezuela expects early production from its large offshore Perla gas field within the first three months of 2013, pushing back its initial estimate for output to begin by the end of this year, a spokeswoman at state energy company PdVSA confirmed Wednesday.

In December, PdVSA signed a contract with Italy's Eni and Spain's Repsol YPF to develop the field, which Venezuelan officials said would help satisfy domestic demand. The project, which was scheduled to receive some $4.5 billion in investment, is expected to help Venezuela overcome power shortages that have plagued the country in recent years.

The PdVSA spokeswoman didn't specify the reason for the delay, saying the information was coming from the company's gas division chief, Orlando Chacin. A Repsol spokeswoman in Caracas said she didn't have any further information on the project. 'Whatever PdVSA says, that's what will happen,' she said Wednesday on the sidelines of a gas-sector conference being held in the Venezuelan capital. An Eni spokesman didn't immediately return calls seeking comment.

Despite boasting one of the world's largest gas reserves at around 195 trillion cubic feet, insufficient domestic supply has resulted in Venezuela having to import more than 200 million cubic feet of gas daily from Colombia to meet its power needs. Signs that Venezuela would continue to rely on foreign gas shipments in the near term came last month as Colombian Energy Minister Mauricio Cardenas said his country plans to increase supplies to Venezuela to 250 million cubic feet in June and then to 300 million cubic feet by September.

Project development has been slow in Venezuela, which some critics attribute to red tape and regulatory uncertainty emanating from President Hugo Chavez's government.

The Perla fields hold 16.3 trillion cubic feet of gas, equivalent to approx. 3 billion barrels of oil. In December, PdVSA chief Rafael Ramirez, who is also the country's oil minister, projected around 300 million cubic feet of gas daily would be produced at the site by 2013. In subsequent phases of the project, production is seen rising fourfold to 1.2 billion cubic feet a day, which will be maintained until the end of the contract in 2036.

The European companies currently have split ownership of Perla, which is located in the Cardon IV block and is considered Latin America's largest natural-gas find. However, PdVSA has a 35% back-in right to be exercised in the development phase, which will leave Eni and Repsol each with a 32.5% stake.

Photo - see caption
Location of Perla gas field. Map shows partner Eni's Venezuelan operations. (Source: Eni)

See related article: Eni confirms successful Perla-4 appraisal well in the Cardón IV Block - upgrades gas reserves

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Source: Dow Jones Newswires via Fox Business

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