ChevronTexaco Corp. and Spain's Repsol agreed Thursday to invest $6 billion to develop a new oil field in Venezuela, home to the largest oil reserves in the Western Hemisphere.
The project will include the production of extra-heavy Faja crude and a new regional pipeline to carry the oil, San Ramon, Calif.-based ChevronTexaco said. It will also include new facilities in Venezuela to upgrade the crude to a high-quality synthetic crude or fuels.
Chief Executive David O'Reilly is increasing investment in Venezuela to offset declining output from older wells in other parts of the globe. Venezuelan wells accounted for 8.6% of ChevronTexaco's worldwide oil production in 2004. The company is the largest foreign producer of Venezuelan oil.
"For all of the major oil companies, Venezuela is a growth area," said Louis Gagliardi, an analyst at Norwalk, Conn.- based John S. Herold Inc. and a former Texaco Inc. executive. Bringing in Repsol "is a way they can diversify the risk on a big project like this."
LA Times
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