Venezuela bid has big risks, rewards for oil majors

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)

Brazil girds for massive offshore oil extraction

by Juan Forero, for Petroleum World News, December 8, 2009.

But then, so is the challenge facing Brazil’s state-controlled energy company, Petrobras: developing a group of newly discovered deep-sea oil fields that energy analysts say will catapult this country into the ranks of the world’s petro-powers. The oil pools are 200 miles out in the Atlantic and more than four miles down, under freezing seas, rock and a heavy cap of salt.

Petrobras, which until recently was little known outside oil circles, has launched a five-year, $174 billion project to provide platforms, rigs, support vessels and drilling systems to develop tens of billions of barrels of oil. Energy officials here project that Brazil — still an oil importer five years ago — will in the next decade have one of the world’s biggest oil reserves.

“It’s going to change the role of Brazil in the geopolitics of oil,” Petrobras’s president, José Sergio Gabrielli, said in an interview at the company’s headquarters in Rio de Janeiro. “We are going to become a much bigger producer.”…(continue reading)