Malaysia’s state-owned Petronas is pulling out of one of the biggest petroleum projects in Venezuela after a dispute with state-run Petroleos de Venezuela (PDVSA), Reuters reported Monday.
The Orinoco Belt project known as Petrocarabobo was formed in 2010. It has an investment budget of $20 billion over 25 years. Two years ago it started production with a capacity of 400,000 barrels per day.
The project also includes planned development of a 200,000 barrel per day upgrader to convert heavy crude into light crude oil.
PDVSA owns 60 percent of Petrocarabobo.
Petronas holds 11 percent through a consortium that also includes Spain’s Repsol, India’s ONGC and two smaller Indian firms, Reuters said.
Venezuela’s Petroleum Minister Rafael Ramirez didn’t comment Monday.
Venezuelan law requires government approval for any exit by a project partner.
A source told Reuters ‘that frequent changes in the fiscal framework, disagreements with the government of Chavez’s successor – Nicolas Maduro – about the business terms, and long delays led to the decision to withdraw.’
Tar and oil sands in the Orinoco Belt may contain 900–1,400 billion barrels (2.2×1011 m3) of heavy crude in proven and unproven deposits, according to the United States Geological Survey.
Venezuela’s plans to increase its stagnant production through recovery of heavy crude from the Orinoco Belt face technical challenges and questionable economics.