Pdvsa and ENI (Italy) set up joint venture to build a refinery

[ChangoLoa]

The refining unit will process 240,000 barrels per day of extra heavy crude oil at the Orinoco Oil Belt and up to 110.000 bpd of other crude oils to produce diesel

ECONOMY

Venezuela on Thursday authorized the creation of a joint venture by and between state-run oil company Petróleos de Venezuela (Pdvsa) and Italian oil and gas multinational company ENI, to build a refinery intended to process heavy crude oil from the Orinoco Oil Belt and to produce oil finished products.

Pdvsa and ENI participate in a joint venture for the development of the Junín 5 block of the Orinoco Oil Belt, which is expected to process a total of 240,000 bpd in its phase of development. Pdvsa has a 60 percent stake in the company.

More:
http://english.eluniversal.com/2010/11/18/en_eco_esp_pdvsa-and-eni-set-up_18A4747531.shtml

[social_critic]

1. Now for the real deal

We'll have to wait to see if they have sufficient engineering done to define costs so they can apply to finance the refinery.

[ChangoLoa]

2. ENI looks pretty committed with Venezuela

Let's see...

[social_critic]

3. Really?

Last time I checked they weren't hiring. I talked to a Venezuelan engineering student who has rocket scientist grades, and he hasn't even been called for an interview. So either ENI is screening out candidates because they don't have the right (meaning chavista) credentials, or they're just blowing hot air. Or they plan to use Italians?

[CJvR]

4. Signed, and then what?

I have heard of alot of deals being signed, but not of anything constructive actually coming out of them. Investing in a cleptocracy with PDVSA (aka Chavez's cash machine) as the senior partner is hardly an ideal situation.

[social_critic]

5. These multinationals play a waiting game

They must be waiting to see what happens in 2012. Meanwhile they sign whatever papers they have to, but don't spend much. They are really good at this type of maneuver. The really sad thing is the way these deals are signed, without taking bids. The ENI deal was negotiated, there was no bidding for the block. Now, maybe ENI is stupid, and they are putting too much on the table. But it's hard to tell because the details aren't published. Maybe ENI figures they can use the refinery as vaporware. I do know this refinery wasn't included in PDVSA's master plan. So they are building something at a location PDVSA felt wasn't needed.

[ChangoLoa]

6. Well...

Under this government, production in the Orinoco belt has increased from 150,000 B/day to around a million. On the other hand, PDVSA's 'traditional' production (excluding associations with multinationals) has decreased from 3.2 to 1.8-2 MB/day.