Italy-based oil and gas major Eni and PDVSA (Petróleos de Venezuela), the state-owned oil and gas corporation of the Bolivarian Republic of Venezuela, signed contracts for the creation of two joint ventures (Empresas Mixtas, Mixed Enterprises). The first, PetroJunín, is dedicated to the development of Junín 5 Block, located in the Orinoco Oil Belt some 550 kilometers south east of Caracas. The second, PetroBicentenario, is dedicated to the construction and operation of a refinery in the area of the existing industrial coastal complex of Jose.
|Map of Orinoco’s Faja area. Click to enlarge.|
PDVSA will own 60% of both JVs, according to the terms of the new hydrocarbon law of the Bolivarian Republic of Venezuela.
In January 2010, the US Geological Survey issued a technical announcement that an estimated 513 billion barrels of technically recoverable heavy oil (of more than 1 trillion barrels of heavy oil in place) are in Venezuela’s Orinoco Oil Belt. The area contains one of the world’s largest recoverable oil accumulations, and this assessment was the first to identify how much is technically recoverable (producible using currently available technology and industry practices).
The Junín 5 Block has 35 billion barrels of certified oil in place with recoverable reserves estimated in excess of 2.5 billion barrels (Eni share is more than 1 billion barrels). Daily production for Eni will be close to 100,000 barrels per day at full field development.
The companies plan to achieve an early production phase of 75,000 barrels per day with first oil expected by 2013 and a long term production plateau of 240,000 barrels per day to be reached in 2018. Approximately 1,500 horizontal shallow wells will be needed for the full field development.
The new refinery will have a capacity of 240,000 barrels per day plus the ability to process additional volumes of approximately 110,000 barrels per day of intermediate streams from other PDVSA facilities, which will provide additional value to the project. The refinery will be built in the Jose Industrial Complex, which provides access to export markets and ensures synergies with existing industrial services. The construction of this facility creates value in-country in line with PDVSA’s and Venezuela’s development strategies. Final high quality products will target European and Caribbean markets with an estimated premium above Brent.
Eni will pay a bonus of US$646 million, with US$300 million at the publication of the contracts of incorporation of the Mixed Enterprises and the balance in tranches according to the achievement of milestones of the project. Awarding of major contracts is expected in 2011 for early production and in 2013 for full field development.
In Venezuela, Eni is present in Petrosucre, which operates the offshore Corocoro Field (PDVSA 74%, Eni 26%) with a daily equity production of approximately 10,000 barrels of oil, and is co-operator with a 50% stake in the offshore Cardon IV licence where the giant Perla gas field was discovered in October 2009. Perla has an estimated gas in place in excess of 14 trillion cubic feet of gas (2.5 billion barrels of oil equivalent).
With two world-class projects like Junín and Perla, Eni expects to boost its country net production from the actual 10,000 to more than 180,000 barrels of oil equivalent per day in 2019, with more than 1.5 billion of net reserves.
Schenk C.J., Cook, T.A., Charpentier, R.R., Pollastro, R.M., Klett, T.R., Tennyson, M.E., Kirschbaum, M.A., Brownfield, M.E., and Pitman, J.K., 2009, An estimate of recoverable heavy oil resources of the Orinoco Oil Belt, Venezuela: U.S. Geological Survey Fact Sheet 2009–3028, 4 p.