Venezuela inks US$430mn deal for Orinoco ramp-up

Wednesday, August 29, 2018

Local and international groups will invest US$430mn to boost crude oil production in Venezuela's Orinoco belt by more than 600,000b/d under a plan announced by state-run firm PDVSA.

The service providers involved in the agreement are Well Services Cavallino, Petro Kariña, Helios Petroleum Services, Shandong Kerui Group, Consorcio Rinoca Centauro Karina, Consorcio Petrolero Tomoporo and Venenca, according to a PDVSA statement.

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Output at 14 wells will rise to 1.25Mb/d from 384,000b/d, according to officials, who did not specify a timeframe for the ramp-up.

"We are guaranteeing an increase of more than 600,000b/d ... to end 2018 on an upward cycle and foreseeing new goals for 2019," President Nicolás Maduro said at the signing ceremony, according to a statement.

PDVSA said payments would be made "based on the production delivered by the service provider."

The announcement comes as the government attempts to jumpstart its ailing oil industry, which accounts for more than 95% of Venezuela's export revenue.

Crude output in the South American country has fallen this year to a six-decade low, throttled by years of mismanagement, dwindling investment and hyperinflation.