LONG LIST OF INVITEES FOR NEW VENEZUELAN OFF-SHORE

C O N F I D E N T I A L CARACAS 000925 SIPDIS NSC FOR CBARTON ENERGY FOR DPUMPHREY AND ALOCKWOOD TOKYO FOR SFLATT E.O. 12958: DECL: 03/29/2015 TAGS: EPET VE SUBJECT: LONG LIST OF INVITEES FOR NEW VENEZUELAN OFF-SHORE GAS ROUND REF: CARACAS 874 Classified By: Economic Counselor Richard Sanders; for reasons 1.4 (b) and (d) -------------- SUMMARY -------------- ¶1. (C) Venezuela's newest off-shore natural gas bid round, the "Rafael Urdaneta" project, will be launched at 10:30 am on April 4 in Punto Fijo, Falcon state. Six blocks will be offered for bid. We have received the names of 37 of 46 companies invited to participate. The list is heavy on third world, state-owned companies. Two U.S. companies that have recently figured in public disputes with the GOV - ExxonMobil and Harvest International - were conspicuously absent although, after some delay, ExxonMobil received an invitation to participate. End Summary. ¶2. (U) The "Rafael Urdaneta" project, the bid round for off-shore blocks located in the Gulf of Venezuela and off Falcon state, will be launched at 10:30 am on April 4 in Punto Fijo, Falcon state. The GOV is chartering aircraft to transport invited oil company executives from Caracas to Falcon. In the first phase of a multi-phase process, offers will be requested for the award of licenses for six blocks. The technical data package will, however, contain information relating to all the blocks that have so far been designated in the Gulf of Venezuela and off Falcon state. (Note: until now, the main focus on efforts to strike a natural gas deal has been in eastern Venezuela, with the "Mariscal Sucre" project in the Gulf of Paria, adjacent to Trinidad, and the "Plataforma Deltana" project near the mouth of the Orinoco. End note.) So far, we have verified that invitations would be issued to the following 37 companies although we have been told that the list numbers 46: Amerada Hess (US) Anadarko (US) Apache (US) Billington (UK) BP (UK) ChevronTexaco (US) ConocoPhillips (US) CNPC (China) Devon Energy (US) ENIi (Italy) El Paso (US) Encana (Canada) Gas de France (France) Inelectra (Venezuela) Kuwait Petroleum Company (Kuwait) Marubeni (Japan) Mitsubishi (Japan) Nimir Petroleum Venezuela BV (Saudi Arabia) ONGC (India) Perenco (France) PetroBras (Brazil) Petro-Canada (Canada) PetroNas (Malaysia) PlusPetrol (Argentina) Repsol YPF (Spain) Sasol (South Africa) Shell (Netherlands/UK) Sinotec (Taiwan) Sinochem (China) Sonatrach (Algeria) Statoil (Norway) Sumitomo (Japan) Tecpetrol (Venezuela) Texas International Petroleum (U.S.) Teikoku (Japan) Vinccler Oil & Gas (Venezuela) Total (France) Four member companies of AVHI (Asociacion Venozolana de los Hidrocarburos),the association representing the international oil industry, were not initially invited to participate. They include U.S. companies ExxonMobil and Harvest International and two Venezuelan companies, Otepi and Tecnoconsult. -------------- COMEDY OF ERRORS SURROUNDING EXXONMOBIL -------------- ¶3. (C) ExxonMobil contacted econoff on March 29 to inform her that it had not been invited to participate in the new bid round. ExxonMobil de Venezuela Public Affairs Manager Richard Bailey subsequently told econoff on March 30 that ExxonMobil de Venezuela President Mark Ward received a call directly from Minister Ramirez,s office the afternoon of March 29 telling him that ExxonMobil was invited. After attempts to verify this through the office of Vice Minister Mommer, ExxonMobil received a call early March 30 telling it that the original call from Ramirez's office was a mistake and the company was NOT invited to participate. A short while later another caller again told the company that it was invited. ExxonMobil has told the GOV that it hopes to participate but will not proceed in any way until it receives a faxed invitation. -------------- COMMENT -------------- ¶4. (C) It seems that the GOV first sought to retaliate against ExxonMobil for its public posture in opposition to the unilateral GOV decision to increase the royalties on its Cerro Negro heavy crude project from 1 pct to 16.67 pct. (Exxonmobil had refused to waive its option to seek arbitration regarding this act.) Apparently it then thought better of it. U.S. independent Harvest remains off the list. (It had been pressed by PDVSA to give it a higher share of earnings on its field here, with PDVSA using as leverage its refusal to approve, as is required under the terms of the contract, Harvest's investment budget, and Harvest in turn shutting down operations and publicly notifying investors of PDVSA's act.) Harvest, of course, ultimately has less leverage than industry giant ExxonMobil. The two Venezuelan companies that have been struck off the invitation list seem to be on a PDVSA black list, at least with respect to western Venezuela. McFarland NNNN 2005CARACA00925 - CONFIDENTIAL