Last night Miguel of The Devil’s Excrement, Siggy and I started by discussing maletagate – the news story of the Venezuelan caught trying to go into Argentina with US$ 800,000 in cash in a suitcase intended for Kirchner’s campaign. Said Venezuelan had taken 11 trips to Argentina prior to the one when he was caught.
Daniel of Venezuela News and Views was unable to join us due to internet connection problems, but later in the podcast oil industry expert and former PDVSA executive Gustavo Coronel of Las Armas del Coronel called in and we also talked about the Canada-Libya oil agreement.
Here’s an article with background information: Petro-Canada, Libya Agree on $7 Billion Spending Plan
Dec. 10 (Bloomberg) — Petro-Canada, the country’s third- largest oil company, and Libya’s state-run National Oil Corp. agreed to invest about $7 billion in exploration projects in the North African nation.
“Petro-Canada will pay 50 percent of all development capital and will receive a 12 percent entitlement share of production,” the Canadian company said today in statement. That’s a reduction of its share of output from existing oil ventures in Libya, National Oil said yesterday.
The Calgary-based company signed today an agreement with National Oil on the development of the fields in Libya’s Sirte Basin. Its existing participation agreements and old exploration production-sharing accords were converted into six new pacts.
Petro-Canada was the fourth company to revise its contract with Libya in about a month, following Italy’s Eni SpA, Occidental Petroleum Corp. of the U.S., and Austria’s OMV AG. Libya is negotiating contract renewals to secure better terms as oil prices soar, National Oil Chairman Shokri Ghanem said last month.
Petro-Canada also said it agreed to pay $1 billion in a bonus and invest $460 million over the next seven years for exploration of the Sirte region. The Canadian company’s projects pump about 100,000 barrels of oil a day in Libya now. Its output will double in the next five to seven years and stay at the higher level for a decade, the company forecast.
Most of the concessions were scheduled to end in 2015 and the new agreement extends the company’s participation by 30 years, according to Petro-Canada’s Web site.
The company received a percentage of revenue under the old agreements, making it difficult to compare to receiving output under the new terms, spokesman Tom Carney said.
“We’ve just gone to a completely different contractual form,” he said in a telephone interview. A national oil company “is going to want to say they’ve done a good deal for themselves, but we think we’ve done a pretty good deal as well.”
Petro-Canada rose 31 cents to $50.66 at 10:31 a.m. on the Toronto Stock Exchange. The stock has gained 6.1 percent this year.
Imperial Oil Ltd., owned 70 percent by Irving, Texas-based Exxon Mobil Corp., is Canada’s largest oil company by sales, followed by EnCana Corp. Both companies are based in Calgary.
Why Canada bypassed Venezuela’s oil altogether is one of the subjects we discussed. (Related article: The War on Energy Security.)
Listen to the podcast. I’m sure you’ll find it most informative.
Special thanks to Miguel, Gustavo and Siggy.
Cross-posted at Heading Right