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Saturday, August 11, 2007

President Chávez offers drills to Ecuador in the middle of Venezuelan crisis

According to Venezuelan President, a drill assembly plant could be built in Ecuador (File photo)

There are plans to remove from Tomoporo field one of the drills made available to Ecuador. A second drill is part of a Chinese shipment expected to arrive by the end of 2007.

EL UNIVERSAL, August 10, 2007

Venezuelan President Hugo Chávez offered to send Ecuador two drills next October and November, as part of multiple energy agreements executed during the president's South American tour.

The head of state gave the news during a ceremony last Thursday along with his Ecuadorian counterpart Rafael Correa at Carondelet presidential palace, reported official news agency ABN.

Chávez explained that the drills would help Ecuador increase its oil output by 10,000 bpd. Ecuador is planning to get back this year to the Organization of Petroleum Exporting Countries (OPEC). One of the pieces promised is to be taken from Tomoporo, a successfully expanding area, located in the eastern coast of Lake Maracaibo, western Zulia state. The second one is part of a set of 13 pieces that will be delivered by Chinese CNPC to state-run oil holding Petróleos de Venezuela (Pdvsa) this year.

The president's offer came at a time when Pdvsa Vice-President Luis Vierma is facing charges at the National Assembly (AN) in connection with a recent bidding of drills in 2006-2007. Only five out of the 12 bidders completed the delivery of the equipment.

As a result, in the depths of a "significant operational crisis" as labeled by Pdvsa, the corporation is working on an emergency bidding of 53 drills. The equipment is expected to join at least three Chinese drills set to arrive this year and raise the number of operational drills from 112 to 191.

The delay has been concomitant with a fall in the oil domestic output, from 3.3 million bpd in 2006 to 3.07 bpd in 2007, following a cut at 195,000 bpd, as instructed by OPEC. But the drop is related also to a new contracting method, which includes the commitment to engage in activities for the sake of local communities. Multinationals have refused to accept such requirement, and this has shown Pdvsa vulnerability in this regard, according to Pdvsa CEO and Minister of Energy and Petroleum Rafael Ramírez.

Chávez pondered on the possibility to build in Ecuador a drill manufacturer, a project similar to the project intended in Venezuela along with CNPC and which may help Pdvsa assemble its own equipment next year.

Translated by Conchita Delgado

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