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Venezuela, Royal Dutch Shell Sign New Oil Pumping Pact

From The Associated Press
 
EXTRACT: “…Shell CEO Jeroen van der Veer discussed opportunities for further joint projects during a meeting Friday. Shell has expressed interest in investing in Venezuela’s oil-rich Orinoco River basin.”

THE ARTICLE

CARACAS (AP)–Royal Dutch Shell PLC (RDSA) became the first major oil company to finalize a joint venture agreement with the Venezuelan government that brings oil pumping operations under state control.

The Anglo-Dutch company signed a new contract replacing its previous agreement to independently pump oil at the Urdaneta West field, the state-run Petroleos de Venezuela SA, or PDVSA, said in a statement late Friday.

The new contract gives PDVSA a 60% stake in operations at the 45,000-barrel-a-day oil field and leaves Shell with the remaining 40%.

Further details of the contract terms were not immediately available.

President Hugo Chavez’s administration has demanded a greater share of control and revenues from oil operations in Venezuela.

Earlier this year the government ordered private firms, including Shell, to turn 32 oil fields into state-controlled joint ventures and seized installations from those companies that refused.

“This agreement with Shell, one of the most important oil companies at the international level, shows that Venezuela continues to be a safe and transparent country for investment,” said PDVSA Director Eulogio Del Pino.

“With this signature today, a new era begins in the Venezuelan oil business where control of production is in the hands of the state,” he added.

PDVSA said separately that Oil Minister Rafael Ramirez and Shell CEO Jeroen van der Veer discussed opportunities for further joint projects during a meeting Friday. Shell has expressed interest in investing in Venezuela’s oil-rich Orinoco River basin.

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