Repsol, Eni launch first gas field off Venezuela

OREANDA-NEWS. July 07, 2015.  Spain Repsol and Italy Eni have launched Venezuela?s first-ever commercial offshore natural gas production from the Perla field.

The shallow water field, located in the Cardon 4 block in the Gulf of Venezuela, is the largest offshore gas deposit discovered to date in Latin America and the most extensive new industrial project in Venezuela since the 1990s installation of oil upgraders that were later nationalized by the government.

Discovered by Repsol and Italy Eni in 2009, the field holds an estimated 17 trillion ft3 of gas in place, in addition to around 182mn bl of condensates.

Repsol and Eni have 50pc apiece in the Cardon 4 license, but Venezuelan state-owned PdV has a legal mandate to farm in with a 35pc stake.

Perla gas production is expected to reach 150mn ft3/d (4.2mn m3/d) by the end of July, tripling to 450mn ft3/d by December. Production will rise to 800mn ft3/d in 2017 and peak at 1.2bn ft3/d in 2020.

The partners are expected to start producing condensates by the end of the year, starting at around 10,000 b/d and ramping up to a peak of 28,000 b/d in 2020.

Cardon 4 to date has installed one platform and completed seven of up to 26 planned gas production wells. The full development will include four light offshore platforms linked to a 30-inch pipeline to an onshore central processing facility at Punto Fijo on the Paraguana peninsula, where PdV operates the 940,000 b/d CRP refining complex.

Initial gas production in the three-phase development will be absorbed in the domestic market, helping to displace some liquid fuels used by state-owned utility Corpoelec and state-run petrochemicals firm Pequiven. The terms of the domestic gas sales have not been disclosed.

The condensates will be exported, giving Caracas a new source of much-needed hard currency.

The condensates will be marketed in a separate joint venture in which PdV holds a majority 60pc stake, with 20pc apiece for Repsol and Eni.

Venezuela?s rules for oil developments require PdV to hold a minimum 60pc stake. Rules governing gas projects allow other companies to hold up to 65pc.

Net gas production for Repsol and Eni will reach around 40,000 b/d of oil equivalent in 2015 and 110,000 boed in 2020.

The ground-breaking Cardon 4 project has suffered delays, but in contrast to PdV?s stalled heavy oil joint ventures, it has advanced at least in part because specialized local and foreign contractors are working directly for Repsol and Eni, rather than heavily indebted PdV, industry executives say.

Perla could be a harbinger of significant offshore oil and gas development across the northern arc of South America. US independent Anadarko and other oil companies are exploring off Colombia?s Caribbean coast, and ExxonMobil recently made a "significant" oil discovery off Guyana.