Venezuela ‘06 Foreign Oil Investment Plunges; Exploration Up

Foreign oil investment in Venezuela fell 55% in 2006 compared with the year-ago period, indicating that firms halted spending amid contract uncertainty.

Figures included in President Hugo Chavez’s year-end message to Congress put foreign oil investment at 35 billion bolivars ($16.3 million) last year, down from VEB76 billion ($35 million) in 2005.

Last year Venezuela took majority control of 32 oil fields that were previously operated by outside firms. Venezuela still has to finalize some contract details for the new joint-venture companies, such as payment for oil sales to the state-run Petroleos de Venezuela S.A. This has forced many private firms to delay needed field maintenance programs.

Venezuela’s foreign investment cycle reached a peak at the start of the decade as oil majors invested heavily in multi-billion-dollar extra-heavy crude projects and increasing output at the 32 “mature” oil fields.

Rigzone