Offshore staff
(Venezuela)- ConocoPhillips will begin production at its Corocoro offshore oil field in eastern Venezuela in early 2007, according to Eulogio Del Pino, a director at state oil company Pdvsa.
"Corocoro will begin producing at the beginning of next year," Del Pino said. The drilling platform, which was hired earlier this year from Ensco International Inc., is in Venezuela and drilling equipment is arriving.
ConocoPhillips, the operator of the field, initially planned to begin drilling in late 2004 but ran into contract and tax complications with Pdvsa, one of the field partners.
Pdvsa insisted that ConocoPhillips build a drilling platform locally to aid domestic oil service companies. Venezuela also hiked the royalty rate on the project to 16.6% from 1%, which will be lifted again to 33.3% under a new law recently passed in Congress.
This move is not new for Pdvsa. The state company has been taking steps for some time to increase revenue from existing private oil operations in the country by hiking taxes and forcing firms to cut costs.
The field, discovered by ConocoPhillips in 1999 and declared commercial in 2002, is a key component of Venezuela's production expansion plans. Venezuela is betting on Corocoro to help offset declining production at some of its mature fields.
Once production starts, the project will eventually produce 120,000 b/d.
Pdvsa subsidiary CVP, of which Del Pino is president, has a 35% stake in the field. ConocoPhillips' other partners include Italy's ENI Spa (E) with a 26% stake, and Taiwan's OPIC Karimun Corporation with a 6.5% stake.
Pdvsa has been funneling windfall oil revenues into popular social- outreach programs and needs help from private firms to ramp up oil production, analysts have said.
5/26/2006
