Page 6 - FSUOGM Week 24 2019

FSUOGM COMMENTARY FSUOGM Source: Gazprom
course for discussions on a US$1.2 billion explo- ration and production project targeting the La Ceiba, Madidi and Vitiacua blocks in the south- ern Chuquisaca department.
Venezuela
Gazprom was one of several Russian companies that showed great interest in Venezuela during the last decade. In early 2005, it signed an MoU with the national oil company PdVSA on plans for co-operation in multiple areas in the future.
Just a few months later, Gazprom teamed up with Zarubezhneftegaz, another state-owned Russian entity, to bid for the right to play a role in the Rafael Urdaneta project. It won the tender for a contract that allowed it to explore and develop the Urumaco-1 and -2 blocks in the Gulf of Ven- ezuela and set up two subsidiaries to operate the sites. e blocks may hold as much as 100 billion cubic metres of gas.
en in 2008, the Russian giant nalised a deal with PdVSA on analysis and certi cation of the reserves of Ayacucho-3, a block within Ven- ezuela’s Orinoco oil belt that is believed to hold 170-180 million tonnes of heavy oil in recover- able reserves. In the same year, it set up a joint venture with PdVSA and began o ering turnkey construction services at Venezuelan oil and gas elds and infrastructure.
Since then, Gazprom has carried out a num- ber of service contracts in Venezuela. It went fur- ther in 2013, signing an agreement on technical co-operation with PdVSA.
To date, the Russian company’s interest in Venezuela has borne relatively little in the way of results. Gazprom has yet to undertake any major upstream or midstream projects there, though it has mulled offers from Caracas to invest in several other gas and heavy oil elds. It has, though, been involved in e orts to prop up the Venezuelan state’s nances. In 2013, for example, it agreed to lend Caracas about US$1
billion, ostensibly to help PdVSA pay o some of its debts and accelerate development work at the Urumaco elds.
Overall, though, Gazprom’s interest in Vene- zuela has waned in recent years, largely because of the economy. e company’s banking arm Gazprombank did remain active there until ear- lier this year, when it stopped interacting with PdVSA and froze that company’s accounts. It took this step in order to avoid the possibility of incurring penalties under the US government’s sanctions regime, which restricts trade with Venezuela.
Other countries
Elsewhere in South America, Gazprom’s activi- ties are somewhat limited.
e company has looked into opportunities for taking part in gas trading and delivery deals and for supporting infrastructure and construc- tion projects. Earlier this year, for example, it showed interest in Brazil’s upstream prospects. In April, the company was reported to be con- sidering participation in the 13th round of concession auctions. And in 2014, it signed a contract with Canada’s Paci c Rubiales on the purchase of LNG from Colombia. Under this deal, worth up to US$200 million, it will pick the gas up from a terminal on the country’s Car- ibbean coast.
Nevertheless, these e orts are considerably more modest in scale than the company’s activ- ities in Argentina, Bolivia and Venezuela. is may change eventually, assuming that oil and gas prices go up and make overseas investment projects more attractive and cost-e ective. In the short term, though, Gazprom is not likely to look for any new acquisitions in South America. Instead, it will focus mainly on its projects in Argentina and Bolivia, leaving Venezuela to the side until that country’s economy recovers and political turmoil subsides.™
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w w w . N E W S B A S E . c o m Week 24 19•June•2019