• 5 minutes Mike Shellman's musings on "Cartoon of the Week"
  • 11 minutes Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 17 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 5 hours Pakistan: "Heart" Of Terrorism and Global Threat
  • 48 mins Saudi Fund Wants to Take Tesla Private?
  • 10 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 59 mins Starvation, horror in Venezuela
  • 2 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 10 hours Venezuela set to raise gasoline prices to international levels.
  • 1 day Batteries Could Be a Small Dotcom-Style Bubble
  • 4 hours Are Trump's steel tariffs working? Seems they are!
  • 1 day Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 2 days France Will Close All Coal Fired Power Stations By 2021
  • 2 days Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 24 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
Bears Are Back In The Oil Market

Bears Are Back In The Oil Market

In the midst of an…

Is Deepwater Drilling More Profitable Than Shale?

Is Deepwater Drilling More Profitable Than Shale?

Conventional wisdom in oil markets…

Protests Expected After PDVSA Awards Orinoco Drilling Contracts

Maduro Oil worker

PDVSA, the state oil company of Venezuela has awarded Schlumberger NV, Horizontal Well Drillers out of Oklahoma, and contractor Y&V from Venezuela $3.2 billion in contracts to drill wells in the Orinoco Belt. There will be three joint ventures in the Belt between PDVSA and foreign partners. PDVSA stated that the goal is to increase production by 250,000 barrels per day in the next 30 months.

Wednesday’s announcement was made amid a measure of discontent from some foreign partners. That unease comes on the heels of a July report by Reuters that stated that the Colombian trucking firm Trenaco was awarded a multi-billion-dollar contract for similar work despite a lack of oil production experience by the company. Suspicions were aroused by an apparent cozy relationship between Trenacos management and Venezuelan President Nicolas Maduro. The $4.5 billion-dollar deal was scrapped after protests by foreign companies.

With regard to the deal announced on Wednesday, some foreign partners are claiming that PDVSA rushed the tender and did not provide sufficient detail about the contracts. A source at one company stated plainly, “We’re going to fight this.” Some of the concerns include the fact that PDVSA, which is in a tight spot financially, requested that bidders provide their own financing; and the fact that the country has yet to find a solution to the problem of scant imports of the diluent, which is required to make the country’s extra-heavy crude into a state that can be transported.

Another concern cited by the foreign partners is the potential for bottlenecks, which could offset any boosts in oil production from the Orinoco Belt. The project is also an expensive one. The information about the objections came to light after interviews with approximately half a dozen sources. Those sources asked to remain anonymous so as not to compromise business in Venezuela.

PDVSA declined to comment about the objections.

Lincoln Brown for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News