The Minister of Petroleum and Mines of Venezuela and President of PDVSA, Rafael Ramírez, Eni’s CEO, Paolo Scaroni, and Repsol’s CEO, Antonio Brufau, have signed the Gas Sales Agreement (GSA) for the commercial development of the super-giant field Perla in Venezuela, one of the world’s largest gas fields that has been discovered in recent years. The agreement, to be followed by the award of key contracts, marks the start of the development activities in the field.
The Perla field, located in the Cardón IV block in the Gulf of Venezuela, 50 kilometres from the shore in a water depth of 60 metres, was discovered in 2009 and subsequently four successful appraisal and delineation wells have been drilled. The current estimate of gas in place is of approximately 17 Trillion cubic feet (Tcf), or 3.1 billion barrels of oil equivalent.
The Cardón IV block is licensed and operated by the Joint Operating Company “Cardón IV S.A.”, owned by Eni (50%) and Repsol (50%). The Venezuelan state company Petróleos de Venezuela S.A. (PDVSA) owns a 35% back-in right to be exercised in the development phase, and at that time Eni and Repsol will each hold a 32.5% interest in the project, which will then be jointly operated by the three companies.
The Gas Sales Agreement, signed with PDVSA Gas, S.A. (a subsidiary of PDVSA), will be in place until 2036. It will provide Venezuela with a further gas source to sustain the growth of the domestic gas market for power generation, refining, petrochemical and heavy oil upgrading projects. The total commitment quantities under this agreement are approximately 8.7 Tcf (1.6 billion barrels of oil equivalent), according to three subsequent production phases planned: Phase I at 300 million standard cubic feet per day, Phase II at 800 million scfd and Phase III at 1,200 million scfd.
Following the execution of the Gas Sales Agreement, Cardón IV will proceed to the Final Investment Decision (FID) for Phase I, which includes the utilization of the wells already drilled and the installation of light offshore platforms linked through a gas pipeline to a Central Processing Facility (CPF) located onshore.
Phase I has an estimated cost of US$ 1.4 billion, incorporating some of the investment necessary for subsequent phases (mainly for pipeline and platforms).
Phase II and III will require additional drilling from the platforms installed in Phase I, and the expansion of the CPF processing capacity.
The huge reserves of the Perla field also create the opportunity for a gas export project. A preliminary agreement has been reached to jointly evaluate export options as well as countries of destination.
Separately, as further evidence of the strategic relationship between the two companies, PDVSA and Eni Trading & Shipping have signed a Memorandum of Understanding to create a joint team for crude oil and petroleum products marketing and shipping.
Eni is also present in Venezuela through its participation in the Junín-5 heavy oil block (PDVSA 60%, Eni 40%), located in the Faja of Orinoco, which holds 35 billion boe of certified oil in place. Junin-5 is jointly operated by two Mixed Enterprises: PetroJunín for the development and production, and PetroBicentenario for the downstream portion, which includes the construction of a refinery in the Jose Industrial Complex. Eni also holds a participation in Petrosucre, the Operating Company which runs the offshore Corocoro field (PDVSA 74%, Eni 26%), with a net production of approximately 10,000 barrels of oil per day.
