Venezuela to start shale gas exploration

Venezuela map flag in abstract ocean illustration
Source: DollarPhotoClub

Venezuela will start searching for shale gas in western Lake Maracaibo, The Mining and Oil Minister Rafael Ramirez announced last week. The exploration will be carried out by a joint venture between Venezuelan state oil company PDVSA holding 60 per cent of the new company, Brazilian Petrobras with 36 per cent, and American Williams Partners with the remaining 4 per cent.

“We’ve approved in the ministry the first explorations for shale gas here in Lake Maracaibo,” Rafael Ramirez, who is also the head of PDVSA, told a conference in the city of Maracaibo.

The minister did not say when exploration would start, nor how much PDVSA and its partners will invest in the project.

PDVSA also has run initial tests for shale gas at nearby La Guajira in the hope of discovering significant reserves of unconventional resources.

PDVSA is also reported to have signed financing deals worth USD 2.2bn with oil service companies Schlumberger, Halliburton and Weatherford. It renewed a USD 1bn credit line with Schlumberger, while the Halliburton and Weatherford arrangements are for USD 600m each, Ramirez is reported to have said.

“The companies will increase their activity in the country, in some cases doubling,” said Ramirez.

With an estimated 195 trillion cubic feet (Tcf) of proven natural gas reserves, Venezuela is the second gas-richest country in the Western Hemisphere behind the United States, yet the country still needs to import natural gas from Colombia and the U.S. to meet its energy needs.

Most of Venezuelan gas is used in the form of gas re-injection to aid crude oil extraction from the country’s mature oil fields. The government has prioritized developing domestic natural gas production for not only industrial need but also for residential and commercial markets, and consequently is developing its gas infrastructure in support of this effort.

This may be why Rafael Ramirez announced today that shale exploration in Venezuela will concentrate on extracting gas rather than shale oil.

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