by Brian Ellsworth and Marianna Parraga, for Reuters, January 29, 2010.
CARACAS (Reuters) – Venezuela’s Carabobo auction presents global oil giants with a major opportunity to gain access to what the U.S. Geological Survey recently called one of the world’s largest reserves of crude oil.
But winners of the auction face risks that could include delays in development, a major financing burden and a thicket of problems building infrastructure from roads, pipelines and ports to high-tech facilities to upgrade the heavy crude.
The leftist government of Hugo Chavez has drawn the interest of global oil giants for projects in the Orinoco region despite nationalizations there just three years ago that boosted concerns about the OPEC nation’s political risk.
Companies are keen on low exploratory risk and manageable production costs offered by the three projects, which will produce 1.2 million barrels per day and hold total estimated 128 billion barrels of oil in place…(continue reading)