Business Today

Archive for February, 2010

The government of socialist President Hugo Chavez signed an agreement with U.S. oil giant Chevron and Repsol Spain on Wednesday with a value up to U.S. $ 40 billion to build reserves in the oil-rich Orinoco Belt region.

Under the new investment laws and regulations approved in 2007, the government-owned oil company Petroleos de Venezuela (PDVSA) has at least 60% of the shares on each of the Orinoco projects.

Chevron, which led a consortium including Japan’s Impex and also Mutsubishi and Suelopetrol Venezuela, will operate in Carabobo Bloc Three, officials said.

Repsol, which led a consortium including Malaysian oil company Petronas and the Indian company ONGC, Indian Oil and Oil India, are assigned to One Bloc Carabobo.

Their investments would be “between U.S. $ 15 billion to U.S. $ 20 billion per project, and production will range from 400,000 to 480 000 barrels per day every block,” said Minister of Petroleum and Energy Rafael Ramirez, who is also head of PDVSA.

For several years experts believe that it is necessary to suck the expensive cost of extracting oil and heavy and very heavy type in the Orinoco Belt, a 55 314 square kilometer area around the Orinoco River.

But the mild decline in oil reserves and rising oil prices – currently around U.S. $ 75 per barrel, compared to U.S. $ 20 per barrel around the 1990s – has been increased interest of foreign investors.

Repsol Chairman Antonio Brufau and Ali Moshiri, head of Chevron’s production and exploration for Africa and Latin America, signed an agreement on a joint event with Chavez.

Projects that are being run in the Orinoco Belt donate 80 billion dollars in investment, said Ramirez.

Orinoco Belt is projected to produce 4.6 million barrels of oil per day in 2020, making Venezuela’s overall production to 6.8 million barrels per day, up from the current 3.0 million barrels per day, Ramirez said.

Some oil companies, like ConocoPhillips and ExxonMobil, based in the United States, left Venezuela after Chavez’s government changed investment laws in 2007 and the nationalization of their assets.

But other oil companies, including Chevron and Repsol, trying to stay in the country and invest in Venezuela under the new rules.

British Prime Minister David Cameron closed the opportunity to coalition with Nick Clegg of the Liberal Democratic Party, but allied with the central bank governor Mervyn King to cut the budget.

The central bank governor supported the plan to cut Cameron’s record budget deficit after discussing the government proposal through a telephone line with Chancellor George Osborne. The new government plan for a two-month emergency budget.

Cameron King’s statement will help to increase his power after the Conservatives failed to win a majority in elections last week, so he was forced to form a first coalition in England since World War II.

His comments may also be drawn criticism within the Labor Party, an opposition party, which makes the increase in spending and efforts to maintain the economic recovery as the jargon of the campaign.

“It was a gift from the central bank (BoE), whereby the central bank to strengthen the political position of the Democratic coalition of Liberals and Conservatives,” said Michael Saunders, chief economist of Citigroup Inc Western European in his notes to investors today.

King’s tenure that lasted five years ended in 2013. Politically, he is always independent of the law and restrict the statement on monetary policy.