Venezuela to Cut Size of Oil Drill Areas

CARACAS, Venezuela – Private oil companies that won 32 operating contracts in the 1990s will see drilling acreage included in the original contracts cut by 60 percent under a proposed law, Oil Minister Rafael Ramirez said Thursday.

Ramirez said the contracts cover 15,500 square miles, but will be reduced to 6,000 square miles because most of the acreage has not been developed. A year ago, the state-oil company Petroleos de Venezuela SA, or PDVSA, said it would compensate oil companies for the contract changes by granting additional drilling areas.

“Although these are areas with extraordinary prospects, we believe that 14,500 kilometers is sufficient for the business plan that we have with the mixed companies,” Ramirez said.

Companies affected by the move include Brazil’s Petrobras, Spanish-Argentine Repsol YPF, U.S.-based Chevron Corp. and France’s Total SA.

AP