This is part of a series of re-published articles I wrote in 2005 for the Daily Journal in Caracas

​Nicaraguans have faced power outages of up to eight hours
Nicaragua's left-wing opposition party has announced an agreement to buy Venezuelan oil at preferential rates. 
Sandinista leader Daniel Ortega said councils governed by the party would be able to buy oil at a 40% discount. 
The rise of global oil prices has caused an energy crisis in Nicaragua which has led to power rationing. 
But the government, which did not take part in the deal, is questioning the Sandinistas' access to the proper infrastructure to carry it out. 
New company 
Nicaragua's main energy supplier, Fenosa, began rationing power for up to eight hours a day earlier in September. 
Fenosa said it was left with no choice after the Supreme Court barred it from raising tariffs to keep up with the price of fuel used to generate electricity in Nicaragua. 
President Enrique Bolanos - who is locked in a power struggle with the Sandinistas - said on Monday that he would ask congress to approve rate increases. 
He also wants congress to allow him to hand over $30m to private energy firms. 
Under the deal announced by Mr Ortega, a Venezuelan-controlled company will be created in partnership with the municipalities. The company will transport, store and deliver fuel. 
More than half of Nicaragua's councils are run by Sandinistas and could benefit from the cheaper oil. 
Venezuela's Ambassador Miguel Gomez said he hoped similar schemes could be extended to other Central American countries. 

Chevron gas enough for LNG train

Daily Journal 

Chevron's Venezuela office confirmed on Wednesday that a recent natural gas find in the Plataforma Deltana could bring the first liquefied natural gas train to Venezuela.

"We are comfortable that the total gas discovered in blocks 2 and 3 of the Plataforma Deltana is sufficient to construct Venezuela's first LNG train," a spokesperson for Chevron in Caracas told The Daily Journal on Wednesday. 

Business News Americas reported last week that Energy and Petroleum Minister Rafael Ramirez had sized the find at 7 trillion cubic feet.

The find comes as Chevron won rights to the Cardon III in the Rafael Urdaneta block off western Venezuela earlier this month.

The company also confirmed that at least part of the gas was found at the offshore Macuira 1X exploration well, which tested at a rate of 51 million cubic feet a day of natural gas. 

The company operates 60 percent of Plataforma Deltana's Block 2 with ConocoPhillips and PDVSA and 100 percent of Block 3.

This is part of a series of re-published articles I wrote in 2005 for the Daily Journal in Caracas
​
OPEC granted Rafael Ramírez his wish. On Tuesday, member countries backed the Venezuelan energy and petroleum minister’s argument that a quota hike was not the long-term answer to high oil prices by keeping the production quota at 28 million barrels per day (bpd).
Ramírez contended before the meeting that the problem of high oil prices stemmed more from global refining shortages and excessive consumption than from a lack of production.
Cartel members appeared to agree, saying they planned to build over 10 new refineries for a 2.4 million bpd increase in capacity by 2011.
“If we increase some barrels, the fundamental situation will not change,” Ramírez said in Vienna, according to a Petróleos de Venezuela (PDVSA) press release.
OPEC did offer an extra 2 million bpd to the market – which represented all of its spare capacity – in an attempt to quell surging prices after Hurricane Katrina knocked out 800,000 barrels per day (bpd) of refining capacity on the Gulf Coast. But Ramírez suggested that the extra offer may not lower prices, Bloomberg reported.
Ramírez has also insisted that high oil prices are due to excessive consumption, especially in the United States. “We have given enough signals that we are ready to put all the necessary barrels into the market, but the International Energy Agency will have to identify what the problems are in the consuming countries,” Ramírez said in the statement. “They will have to resolve the issue of their production capacity.”

PDVSA investment
PDVSA’s plans to increase investment from $5 billion to $10 billion per year and official production from 3.3 to 5.8 million bpd by 2012 suggest that Ramírez has actions to support his words.
The company is expected to announce next week the details on a $3 billion refinery it will build with Brazil’s Petrobras in that country’s northeastern state of Pernambuco.
The plant is expected to be equipped with a capacity of 200,000 bpd and the ability to refine heavy crude.
The state-owned giant is one of three companies that has expressed interest in an estimated $850 million project to expand the Cartagena, Colombia refinery from 78,000 to 140,000 bpd by 2010.
PDVSA has also said it will invest $7.5 billion to build three new refineries in the Faja heavy oil belt with a total production capacity of 500,000 bpd.
The company also plans to spend $2.9 billion revamping its El Palito and Puerto La Cruz plants.
Yet critics have cast doubts on the company’s ability to pull off the new projects, with El Nacional’s José Suárez-Núñez saying some doubters even call the three proposed Faja plants “fantasy refineries.”
Investors could frown at the proposed 400,000 bpd Cabruta plant because it would be situated 100 km from the nearest oil field and 250 km from the Cerro Negro heavy oil field, making pipeline construction an expensive proposition.
PDVSA would also need to build three pipelines-one for crude, product and fuel oil-that would traverse half the country to arrive at the Jose or Güiria refineries, El Nacional pointed out.
Critics also point out that Cabruta is an odd choice for a large plant since only 8,000 people currently inhabit the town.
The government plans to solve that problem by moving people to Cabruta to build a new city of 100,000 residents. President Hugo Chávez contended at PDVSA’s presentation of its future business plan last month that the three Faja refineries were an effort at decentralizing a nation that had 90 percent of its population in the North.
The proposed Caripito plant in the Eastern part of the Faja would process crude from Lake Guanoco.
Yet criticism warns that the lake only has reserves of 36 million barrels, which would run out in only two years in the 50,000 refinery.
PDVSA has also said it will invest $16.8 million in natural gas projects to increase its gas production from 6.3 to 11.5 billion cubic feet per day by the year 2012.
Yet PDVSA’s decision to boot Shell out of the long-awaited Mariscal Sucre gas project has led some critics to question the government’s commitment to natural gas production, especially at a time of towering oil prices.

By Jens Erik Gould
Daily Journal 
Sept 8, 2005

This is part of a series of re-published articles I wrote in 2005 for the Daily Journal in Caracas
 
Energy and Petroleum Minister Rafael Ramirez said on Thursday that any possible decision to raise the OPEC production quota by 500,000 barrels per day (bpd) “won’t make a difference in the market situation."
Ramirez said that high prices would continue for “a significant amount of time” because of deficits in refining capacity and transport.
“This is out of the hands of OPEC. OPEC is willing to give crude to market,” he said.
Ramirez said last week that OPEC countries could not increase production because “they were producing at their maximum levels.”
He also said on Thursday that Venezuela has already designated 1 million barrels of gasoline to be sent to disaster areas affected Hurricane Katrina. He clarified that the shipment will not be a donation to the United States, but he did not give any details about a loan.
The Venezuelan Embassy in the United States said in a press release on Wednesday that the gasoline will be sent in four shipments totaling over 960,000 barrels and will be taken from storage and diverted from other customers. The shipments will arrive by October 1, the statement said.
The shipments will be sent to and distributed by state-run Petroleos de Venezuelaís (PDVSA) wholly-owned U.S. subsidiary, CITGO, and will supplement PDVSA's previously scheduled shipments to CITGO, which amount to of 1.2 million barrels of oil for September, the statement said.
"Venezuela is privileged to be able to help the United States in this time of need," said Bernardo Alvarez, Venezuela's Ambassador to the United States. "We see ourselves as a compassionate people and hope that our efforts will help cope with current market needs of the U.S. for gasoline, and provide some immediate relief to the victims of this horrific natural disaster."