China signs five energy deals with Venezuela
By LYNN J. COOK
Copyright 2005 Houston Chronicle
VIENNA, AUSTRIA - The Americans broke back into Libya this weekend while the Venezuelans cozied up to China in a series of energy deals on the eve of OPEC's Sunday meeting in Vienna.
Libya's auction was the first of its kind to be held in the past 40 years, and it's been nearly 20 years since U.S. oil companies had to abandon their projects there after former President Reagan imposed economic sanctions in the wake of the Lockerbie bombing.
Venezuela's state-controlled oil company, which has recently insisted U.S. companies offer better terms for energy projects, signed five energy deals with China National Petroleum Co. that were part of a broader trade negotiation between the two countries.
In news out of Tripoli, the prospects for U.S. companies were looking up with Amerada Hess, Occidental Petroleum and ChevronTexaco, which won exploration contracts for 11 blocks in Libya.
The government will auction oil exploration rights to another 40 blocks in February. Libya holds Africa's largest oil reserves, with an estimated 36 billion barrels. By comparison, Africa's other OPEC nation, Nigeria, sits atop about 30 billion barrels of oil.
High bidders
ChevronTexaco and Amerada Hess were high bidders on two separate blocks. Amerada apparently could see this announcement coming.
Last week, when the company announced earnings, it included Libyan oil in its 2005 production guidance of 350,000 barrels per day.
Amerada was part of The Oasis Group, which once worked with the Libyan National Oil Co. in the prolific Waha Field.
Houston companies ConocoPhillips and Marathon Oil were also a part of Oasis.
The industry scuttlebutt is that the three companies could soon reach new terms to work in the Waha Field again.
Occidental won nine blocks by putting together bids with other energy firms, including Liwa of the United Arab Emirates, and Woodside Petroleum of Australia.
100 million barrels a day
In Caracas, President Hugo Chavez and China's Vice President Zeng Qinghong were on hand to announce the trade and energy pact.
China National Petroleum Co. and Petróleos de Venezuela say they will conduct joint exploration in several projects offshore and in the Orinoco Oil Belt and Zumano fields.
Venezuela will also provide gas-guzzling China with 100 million barrels of crude oil every day and 3.8 million tons of fuel oil and power plant fuel each year.
Energy watchers are keeping tabs on Venezuela's budding relationship with China. That's because the only country that uses more energy is the United States, where Venezuela ships more than half of its crude exports.
A statement from Venezuela's Oil Ministry said: "The agreements are framed within the shared purpose of tightening friendship bounds and energy and cultural relations. They also represent the will of (the government) to broaden the Venezuelan business scope as well as strengthen and expand its participation in the energy market."
Bloomberg contributed to this report.