Venezuela's inability to develop its natural gas industry as planned has forced it to revise and extend a deal with Colombia's state-controlled Ecopetrol and Chevron involving gas imports from the partners' Guajira gas field in northeastern Colombia, a Caracas-based consultant said Wednesday.
Since a 225-km binational gas pipeline was inaugurated in late 2007, Ecopetrol and Chevron have exported up to 250 million cubic feet of gas daily to mainly industrial clients in and around Maracaibo in western Venezuela's Zulia state. Shipments in recent months have averaged 200 million cubic feet per day.
The renewal deal announced by the two countries last week included unspecified adjustments to the portion of the original deal that called for Venezuela's PDVSA to begin exporting gas to Colombia in 2012, a clause that has been delayed in light of Venezuelan problems in developing its enormous natural gas reserves.
"In my opinion, PDVSA couldn't meet its end of the deal simply because plans to produce natural gas just haven't materialized," said Diego Gonzalez Cruz of Caracas-based GBC Global Business Associates.
According to PDVSA's Seed Plan 2006-2012, the country hoped to be producing 11.5 billion cf/d by this year, but according to official figures, is producing 6.961 billion cf/d. The shortfall means that gas supplies from Colombia are still crucial to meet demand from industrial clients in Venezuela's western region, Gonzalez said.
In an unusual arrangement, Venezuela's state-owned PDVSA financed the construction of the pipeline on both sides of the two countries' shared border, although gas-compression facilities in Colombia were built by Ecopetrol and Chevron. The Guajira field is operated by Chevron.
The 2 1/2-year extension of the agreement runs through mid-2014, according to a statement issued by Ecopetrol on December 29 that detailed the agreement signed with PDVSA. Ecopetrol is 57% owner and Chevron is 43% stakeholder in the Guajira gas operation, which involves two fields called Chuchupa and Ballena.
In November, Chevron told Platts that the company was reopening early next year its Riohacha gas field in Guajira that it had shut a decade ago in order to provide an 8% boost to its Colombian gas production currently averaging about 600 million cf/d. The decision was made to meet rising domestic demand from motorists whose vehicles are powered by natural gas. Continuing international gas demand from Venezuela was also a factor, Chevron country manager David Bantz said.
Chevron is Colombia's largest natural gas producer, providing roughly two-thirds of the nation's 1.1 billion cubic feet of daily gas output from its Guajira fields. Bantz said the decision to reopen the Riohacha field came after seismic tests indicated untapped potential. Although the Guajira fields have been in decline in recent years, Chevron has been able to slow the process with improved production and recovery methods.
Chevron also announced in November that it would spend $20 million drilling two new development wells and also spend $5 million on a gas pipeline extension in the Guajira. In 2003, Colombia granted Chevron an unusual concession in allowing it to continue producing gas indefinitely in the region as long as its fields there remained productive. Most association contracts, by contrast, are limited to 20- or 30-year terms.
