CARACAS -(Dow Jones)- About five consortiums of oil companies are expected to place bids in Venezuela's long-delayed heavy oil drilling tender scheduled for January, according to media reports Friday.
BP PLC (BP) and Royal Dutch Shell PLC (RDSA) may each go it alone with individual bids, said a report from El Mundo newspaper, which cited an unnamed source familiar with the process.
In all, some 17 oil companies are seen as interested in the Carabobo project, which will auction off blocks in Venezuela's eastern Orinoco belt. The government has said the area open for bidding could produce a total of 1.2 million barrels of crude a day, and will require investment of $30 billion.
Some of the firms that are seen involved in the consortiums include China National Petroleum Co. (CNPC.YY), Chevron Corp. (CVX), Total S.A. (TOT) and Spain's Repsol YPF S.A. (REP, REP.MC).
The newspaper said the bids would be delivered between Jan. 12 and Jan. 18. Winning bids would partner with Venezuela's state oil company, Petroleos de Venezuela, or PdVSA, which would retain a 60% majority stake.
The drilling tender, first announced last year, was supposed to have already taken place. But lower global oil prices, a worldwide economic slowdown and tighter credit markets have reduced some of the excitement over the investment opportunity.
But oil companies, taking a long-term approach, remain interested in the project as there is virtually no geological risk in Venezuela's oil-rich Orinoco region. As such, the companies have been discussing with the government ways to modify contract terms to match the current environment and make it attractive for both Venezuela and the foreign companies.
Chevron's president of exploration and production for Latin America and Africa, Ali Moshiri, said earlier this week that part of this process involved the government sending oil companies questions related to the terms. The companies then responded and offered suggestions. Moshiri said this process has worked well.
-By Dan Molinski, Dow Jones Newswires; 58-212-284-5651; dan.molinski@dowjones.com