Thassaloddagas, bu noggahappen.

Eni SpA and Venezuela President Hugo Chavez both announced in the last day that the gas field off Venezuela’s coast that Eni is exploring now appears to have 14 trillion cubic feet of gas. That is a lot of gas. In one gas field, close to the biggest oil refining complex in the Americas, close to a big fat pipeline, close to oilfields that need gas injection. By comparison, Bolivia, a major gas provider to Brazil and Argentina, has less than 10 trillion cubic feet of proved reserves. And these 14 are in one field. It is very unusual nowadays to find so much gas in one place.

From the statement:

Eni announces the successful results of the Perla 3 well … in the shallow water of the Gulf of Venezuela. This well confirms Perla as a world-class supergiant gas discovery, one of the most significant in recent years and the largest ever in Venezuela … the well flowed 68 million [cubic feet] per day of gas and 1,350 barrels of condensate per day … Eni and Repsol have already begun, together with PDVSA, to evaluate options for fast track development Perla through an early production phase of 300 million [cubic feet] per day, targeted to start-up in mid 2013. The early production phase could include utilization of the wells already successfully drilled and the installation of light offshore platforms linked, through a gas pipeline, to a Central Processing Facility located onshore.

Gas field development off Venezuela’s coast is usually delayed by:

-Low fixed domestic prices, with gas field operators getting around $1.50 per 10,000 cubic feet even when the same amount of gas in the U.S. was selling for almost 10 times as much.
-A government commitment to fulfill the domestic market before exporting
-Lousy project managment in offshore development and pipeline construction
-Unclear legal rights to the fields, with the government abruptly changing rules in many industries. It’s been years since the government promised a new gas law, and has never quite implemented the plan
-And these days, low international prices — it’s hard to justify a new plant to convert gas into liquid for export when the price of LNG is now low around the world, and there are more plants coming on stream all the time

Long story short, it’s groovy for Eni and Repsol that they found some gas. But Eni’s “target” of starting production in 2013 is a bit like me or you targeting a date this weekend with Roberta Mancini.


4 thoughts on “Thassaloddagas, bu noggahappen.

  1. Steve

    Not that it means much, concretely, but PdVSA finally signed their contract with Technip to develop the Dragon field (announced at PdVSA web site).

  2. sapitosetty Post author

    Yes! It’s good to see that the wells now being drilled will have a way to get the gas to shore. The statement also said that PDVSA is back to building the submarine pipeline to the planned LNG plant, CIGMA. That construction was halted in the 2008 crisis.

  3. Steve

    Yes, well, the PDV way is to do things in fits in spurts. They already bought the 36″ pipe for the gas line to shore, and it’s in country; it should be installed starting next year. The trees and wellheads for Dragon were purchased in 2007 and will be shipped in 2011. Everything will have to wait until the in-field flowline and platform are ready, currently scheduled for 2013. And that’s if everything works right, meaning …

  4. Daniel Olban

    Changing the Gas Law would be suicide at this stage where most of Venezuelan gas reserves remain under ground and with few exploration studies. Nevertheless, this government likes to drop surprise bombs out of nowhere…anything can happen.

    Elections are just in the middle of the exploitation of Cardon IV, it would be nice for Chavez to use this gas as a political tool just before elections. I guess PDVSA is pushing ENI/Repsol to produce gas a soon as possible. Under that situation it does not sound very logical to change the gas law, otherwise it would delay the project even further……….This country is so fun!!!…..Let’s see what happens…In the meantime……. resilience…..

    Chavez is not eternal, even if we have him 10 years more………..He has a death-seed inside of him (as anyone else’s) it just started to grow…

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