Brazil's government controlled oil corporation Petrobras has cut out from plans to help develop Venezuela's Mariscal Sucre offshore natural-gas field, which was to become the source of the gas to be pumped through the 20 billion US dollars projected Southern Gas Pipeline.
Petroleos de Venezuela SA, (PDVSA) and Petrobras were considering plans to send half the field's output of 34 million cubic meters a day to Brazil. The gas would have fed into the 5.000 kilometer network also supplying other South American countries. Speaking in London on Wednesday Petrobras CEO José Sergio Gabrielli said the corporation "is out of the project". "We were interest and pondered the project, but we are not talking about Mariscal Sucre for the time being". Petrobras and PDVSA are currently negotiating more than 6 billion US dollars of joint refining and exploration projects including a refinery in Pernambuco, but talks have stalled as the relationship between the countries' presidents, Hugo Chavez and Brazil's Luiz Inacio Lula da Silva, swings between friendship and rivalry. Furthermore Brazil has voiced doubts about the certified gas reserves in the project, which has been under planning for more than 15 years. Petrobras' out of the Mariscal Sucre gas field is not the first: Royal Dutch Shell Plc and Mitsubishi Corp. planned development in the field earlier this decade. PDVSA said Qatar's state oil company was close to taking a 9% percent stake in the project in 2003. Last October 26 PDVSA hired Neptune Marine Oil & Gas Ltd. to drill 21 offshore wells for 785 million US dollars and three days later Interfax reported that Gazprom, the Russian oil monopoly, applied for the rights to develop the field along with Plataforma Deltana and Delta Caribe Oriental. PDVSA said last month it would develop the field for domestic use. In Venezuela, gas sales are made at below market prices, a factor that would reduce the field's profitability. The giant Venezuelan oil corporation also stated that the gas is to be exported from a 2.7 billion US dollars liquefied natural-gas plant and among the country clients named figure Colombia, Ecuador, Bolivia, and Panama. More specifically in the Brazil/Venezuela relation, contracts to build the 4.5 billion heavy-oil refinery in Pernambuco, in northeast Brazil, have yet to be signed almost a year after presidents Lula da Silva and Chavez laid the cornerstone for the project. Another contract for the development of the Carabobo field in Venezuela's Orinoco River basin remains unsigned. Petrobras is to own 60% of the refinery and PDVSA the rest. In Carabobo, Venezuela would own 60% and Petrobras 40%. "We are talking with PDVSA only on the refinery in Brazil and on Carabobo'' said Gabrielli, adding that "complex negotiations take time. We need urgency and patience". Petrobras wants to sign the contracts for the refinery and Carabobo by December. However PDVSA CEO said the joint projects would "be reviewed in a meeting between the two presidents, Lula da Silva and Hugo Chavez, and then any official announcements will be made."