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)

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SUMMARY
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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.

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COMEDY OF ERRORS SURROUNDING EXXONMOBIL
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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.

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COMMENT
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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


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2005CARACA00925 - CONFIDENTIAL