Bolivarian Republic of Caracas, January 2007 • N° 10 The New Contact A Newsletter about Venezuela’s National Oil Industry

With the re-election of President Chávez Venezuela further energizes Latin American energy integration page 8

The Ribas Mission PDVSA commited CITGO credit rating is Venezuela nominated continues to train is strengthned (II) to environmental Raised venue of 2007 Energy winners conservation Summit

POPULAR POWER MINISTRY FOR ENERGY AND PETROLEUM The New The New PDVSA PDVSA Contact Contact

SOWING THE OIL >> First fruits are being harvested Misión Ribas: training winners with a socialist spirit

The Ribas Mission is a Project that arose as part of the further deepening of the revolutionary process headed by the president of the Bolivarian Republic of Venezuela, Hugo Chávez, who firmly believes in this educational program “which trains men guided by the socialist ethos”.

he Ribas Mission was born three Under the slogan of “yesterday Independence, today , we winners accept the challenge”, the third anniversary of the RIbas Mission was celebrated in Maracaibo’s bull ring, in Zulia. Tyears ago with the clear vision of consolidating educational democracy the Ribas Mission has gathered Winners of the new homeland in Venezuela, thereby helping solve strength, consolidating an academic the problem of student exclusion from profile based on Socialist ethics and The number of Rivas Mission secondary education by means of morals. For the head of state, the graduates up until December 2005 the formation of integrally educated Mission’s educational model is aimed was 168,000 students. Then, in participants. This program developed at breaking the chains imposed by August 2006, another 250,000 since 17 November 2003, involves the old capitalist model. “It is not the graduated, for a total of 418,000 716,939 students. case of training a laborer to become winners, men and women, in a three- a skilled worker, so that he can year period. This total represents 58% Beginning with the guidelines continue to be exploited by capitalists”, of student population that heeded suggested by President Chávez, President. Chávez said, quoting Italian President Chávez’s original invitation. political philosopher Antonio Gramsci. Orlando Ortegano, president of the The purpose of the Ribas Mission Mission Ribas Foundation, feels is to open avenues towards the that “these figures highly satisfying liberation of the homeland through because they cover barely three an educational process based on years, and are one of the Mission’s enterprise, transformation and cutting main achievements”. When the chains. “The greatest power a country census undertaken to determine the can have is not based on oil, but on number of people excluded from an ethical and educated population”, the secondary education system,

The Ribas Mission as produced 418,000 integrally President Chávez stated. Ortegano was faced with the fact that educated graduates since its creation by 1.4 million people had not completed President Chávez in 2003. their secondary education.

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Productive Professionals

We are truly very well prepared, With the Ribas Mission we can become culturally“ as well as socially and economically productive professionals for our country. because, besides the knowledge obtained, This is an educational system adapted to we have been given the opportunity through the needs of all of us, without exclusions, PDVSA to work in cooperatives within the which is why we, as winners, must do our missions, and we are going to receive special very best, as President Chávez does for training for this purpose. Venezuela. ” Maryerin Luis Alcalá Winner. C.I. 15.752.928 - Valencia, Carabobo.

Maryerin Alcalá, winner of the Valencia branch, of the It is for this reason that President oppressed, excluded but, as Ribas Mission in the State of Carabobo. “We are truly Chávez created the Productive Ribas Aquiles Nazoa said: ‘I believe in the well prepared”. Mission, which seeks to impart greater creative power of the people’. The The Ribas Mission has today more strength to the integration of students Ribas Mission’s integrally educated than 400,000 integrally educated and winners with the organized graduates are the most wonderful secondary school graduates trained by communities. This new project aims to thing that exists between heaven and it, and another 512,728 are undergoing guarantee social security through the earth: the people”, he stated. the process. This illustrates the construction of a socialist economic Venezuelan people’s keen desire for system. The setting up of cooperatives an improved educational system to requires that 50% of its participants produce free men and women, guided be Ribas Mission students, winners by a revolutionary action and thought or graduates, the remainder being which prizes the principles of human members of the community. The solidarity, integration and construction Mission graduates will receive financial of the motherland as envisaged by assistance to develop activities in José Martí: America. agricultures, food, services, tourism, handicrafts production and metal- Socially productive activities working.

The commitment to undertake For President Chavez, the Ribas socially productive activities and Mission must become a powerful services within the communities, social and political movement that currently prevalent among students reaches beyond the noble aspiration

and winners, is one of the academic to become a secondary education Thanks to president Chávez, Ribas Mission has formation’s fundamental pillars. graduate. “The people were helped more than 1.800.000 people to leave the dark “ The student delegates and the winners should be in the forefront Figures and in permanent mobilization with the people 418.000 ” integral graduates in three years 512.728 students in schoolrooms 32.000 enablers throughout the country Rafael Ramírez Popular Power minister for Energy and Petroleum and 1.893 jailed inmates studying President of PDVSA.

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PETROCARIBE >> Consolidating energy security Petrocaribe strengthened (II)

Petrocaribe has, from its very beginning, become consolidated as a Latin American and Caribbean energy Major steps were taken integration initiative.

towards the consolidation of the Petrocaribe Energy Cooperation Agreement during the

last quarter of 2006, as evidenced by the agreements signed through PDV Caribe for

the installation of storage centers in strategic eastern arch Caribbean locations and the

fuel supply accords established with the various island countries of the region.

he major advances made by the Antigua and Barbuda’s geographic distribution to the islands of the TPetrocaribe Energy Cooperation location provide a number of shipping region by means of smaller tankers.” Agreement during the last quarter advantages for the handling and of 2006 consolidate it as one of distribution of fuel for the eastern The agreement contemplates the the most effective cooperation Caribbean area, besides being a refurbishment of mothballed storage agreements established to achieve strategic zone interconnected with tanks, thereby increasing the region’s energy security in the Caribbean and a major part of the 14 countries Central America. As part of these which are signatories of Venezuela’s achievements, Antigua and Barbuda Caribbean unification project through will become a storage center for the Petrocaribe. distribution of diesel oil, jet fuel and gasoline to the countries and islands The PDVSA Refining vice-president in the eastern Caribbean through and president of PDV Caribe, the agreement signed by PDVSA Alejandro Granado, explained that subsidiary PDV Caribe and West “this is the case of a wholesale India Oil Company for the storage of storage agreement that will generate 82,000 barrels of hydrocarbons, in savings by enabling the shipping of In addition to the 90,000 barrels stored at present, addition to the 90,000 barrels already large volumes of hydrocarbons from a further 82,000 barrels of hydrocarbons will be held at the St. Johns storage center. Venezuela, to permit their subsequent available at St Johns storage center in Antigua.

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storage capacity by another 150,000 Venezuela together with cylinders of 10 kilogram capacity barrels and the possibility of effecting St. Kitts and Nevis sign for Liquefied Petroleum Gas (LPG) additional savings in freights. a supply agreement were delivered, in addition to the 47,000 units which have already been Venezuela and Belize sign The supply of 21,000 barrels per placed on the island, representing a a supply agreement month of refined products such as Jet savings mechanism for the population A1 fuel, diesel oil, fuel oil and asphalt in terms of domestic energy for the internal consumption of St. consumption. Kitts and Nevis began in January 2007, thanks to the agreement New agreements signed by PDV Caribe, a subsidiary of Petróleos de Venezuela (PDVSA), Similarly, the Bolivarian Republic of and the St Kitts and Nevis Ministry Venezuela and St. Vincent and The of Public Works, in the framework of Grenadines forged closer fraternal the Petrocaribe Energy Cooperation ties though the signing of a supply Agreement. contract for the monthly delivery of 30,000 barrels of fuel, made up The St. Kitts and Nevis Energy and of diesel oil, gasoline, Jet A1 fuel Public Works minister Earl Asim and LPG, as well as through the Martin pointed out the importance of consolidation of the PDV Caribe St. The fuel to reduce the cost of public transport in the social impact which the supply Vincent and The Grenadines Limited Belize is supplied through Petrocaribe. contract entailed, because it will mixed company. enable a major savings in resources The Bolivarian Republic of Venezuela to be made, resources which will be The ownership of the company is and the government of Belize signed devoted to boosting projects that divided, with PDV Caribe having a a contract for the supply of 4,000 will improve living conditions for the 55% share, while the remaining 45% barrels per day of diesel oil, gasoline, population of the island. is held by state-owned Petrocaribe Jet A1 fuel, lubricants and other St. Vincent and The Grenadines products within the framework of PDV Caribe supplies diesel Limited. the Petrocaribe Energy Cooperation and gas to St. Vincent Agreement, through Belize Petroleum and the Granadines and Energy Limited and PDV Petrocaribe Caribe, a subsidiary of Petróleos de The first liquid fuel shipment supplied Venezuela, S.A. (PDVSA). through the Petrocaribe Energy Cooperation Agreement arrived Belize minister of the Interior, Public at that Caribbean country. The Works and Utilities Ralph Fonseca, 12,000 barrels of diesel oil which it together with Belize Petroleum and contained are intended to power the Energy Ltd director Cresensio Sosa, new electricity generation plant, the and PDVSA Commerce and Supply property of state-owned St. Vincent director and vice-president of PDV Electricity Services Limited (Vinlec), Caribe, Asdrúbal Chávez, signed the located in Lowman’s Bay. agreement. Thornley Myers, Vinlec’s general Mr. Chávez underlined the progress manager, pointed out that the power achieved by both countries in energy generation plant will become the matters through the signing of the most important in the country, by supply contract and the establishing providing 40% of national electricity of a mixed company. “In this manner demand. Moreover, this will enable a the Petrocaribe initiative is further cost reduction that will be transferred The Petrocaribe Energy Cooperation strengthened, and we continue to the electricity bills, which have to advance rapidly towards the increased by close to 40% over the Agreement established the financing of region’s independence in this sense, past few years, thereby affecting all while consolidating the integration areas of the economy. At the same 40% of the oil invoice for up to 23 years process with Latin America and the time, through solidarity trading at 1% interest and two years’ grace. Caribbean”, he said. between the two nations, 4,000

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GUIDELINES >> Venezuela proposes technology exchange agreements OPEC countries advance in techno-energy sovereignty

Delegations from the member states of the Organization of Oil Exporting Countries (OPEC) attended the Second Annual Meeting of National Petroleum Research and Development Institutions.

OPEC representatives analyzed the appropriate argarita Island was the venue management, conversion of oil mechanisms required to achieve technology Mfor the Second Annual Meeting to energy and oil to hydrogen. independence in the energy field. of National Petroleum Research Within this scenario of experiences and Development Institutes hosted interchange, Venezuela declared its highlighting the importance of the by PDVSA INTEVEP, Petróleos de interest in the research developed processes derived from this meeting, Venezuela’s technology arm, with the by Qatar on the gas-to-liquids and pointing out that, with them, aim of boosting joint and balanced transformation process and on the the OPEC member countries would growth in the technology sector of alternate media for the injection of achieve the technological sovereignty member countries, strengthening carbon dioxide into wells, a gas used required to solve their problems and cooperation ties and establishing a in secondary recovery techniques needs in the energy field. discussion space among the various in oil wells and in the cleaning up scientific institutions belonging to of gas used in the liquefaction Towards the achievement of energy national hydrocarbon companies, in process, with the aim of making use independence, the Venezuelan, the areas of exploration, production, of this technology in the Mariscal de Algerian, Indonesian and Qatarian refining, environment and social Ayacucho project being developed delegations agreed to exchange responsibility. by PDVSA as part of the 2006-2012 specialists, with the aim of training Sowing the Oil Plan. them in the operational area, in the The meeting analyzed important exploitation of hydrocarbons and issues such as the interchange of Venezuela’s Energy and Petroleum related research for the development experiences in clean fuels, gas- minister and president of PDVSA of mechanisms and technology. to-liquids conversion, carbon Rafael Ramírez took part in the event,

BUSINESS >> Venezuela reduced its crude production by some 57,000 barrels per day OPEC agreed on a 500,000 barrel per day production cutback uring the 143rd Extraordinary was confident that it would strengthen barrels per day, which is in line with DMeeting of the Organization the crude barrel price. “The reduction our efforts to ensure maximum of Petroleum Exporting Countries for Venezuela totals around 57,000 valuation for the resource, a principle (OPEC), the member states agreed to consistently supported by Venezuela.” cut back crude production by 500,000 barrels per day beginning on February The meeting agreed to the admission 1st 2007 of Angola as a member country, effective beginning 1st January 2007. On departing from the meeting, Similarly, the Libyan representative, held in the Nigerian capital of Abuja, Abdullah Al-Badri, was appointed Venezuelan Energy and Petroleum as new secretary general of the minister and president of PDVSA, Organization, and it was decided that Rafael Ramírez, explained that the the third meeting of the Organization’s The delegations of the OPEC member countries measure taken would contribute to debated on oil policies, in the search for a just heads of state and government would stabilizing the world oil market, and price for the crude barrel. be held next year in Saudi Arabia.

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ENERGY INTEGRATION >> At the Orocual macro-pit in eastern Venezuela Venezuela and Rusia begin work on crude recovery projects

With this project, PDVSA confirms its environmental commitment, being put into effect together with the Russian nation, which strengthens the existing national cooperation ties in the energy area and the complementarity of both nations. PDVSA maintains close relations with its international peers in the hydrocarbons area. a six-year period, as specified in the and preserving nature as the source t the beginning of December 2006-2012 Sowing the Oil Plan, with of life, transforming environmental AVenezuela and Russia, carried the aim of paying off the environmental liabilities into assets that will boost the out a crude recovery pilot test on debt accumulated over the more region’s economic development. It is the Orocual macro-pit, located than 100 years of oil exploitation in estimated that that the results of the in the eastern State of Monagas, Venezuelan territory. pilot test will be applied throughout the which represents one of the first country over the next six years. achievements in energy cooperation In this way the environmental impact by both countries. The second phase generated by oil operations will be of the project entails the certification significantly reduced, while adding and validation of the results by Intevep, significant volumes to the oil available PDVSA’s technology arm. for the domestic market.

The extension of the pilot test for the With the recovery of the pits, previously recovery of crude has the objective considered as environmental liabilities, of cleaning up approximately 13,000 new PDVSA reaffirms its work The new PDVSA follows its commitment to the sludge pits used in drilling wells over philosophy aimed at social commitment preservation of the Environment.

BUSINESS >> Strengthening the market diversification strategy PDV Marina expands its tanker fleet

etróleos de Venezuela continues PDVSA shipping subsidiary PDV required for this type of contract, Pimplementing its strategy of Marina selected Eisa and Maua as well as the specifications of the tanker fleet expansion, as laid down Jurong after evaluating the technical vessels to be built according to the in the 2006-2012 Sowing the Oil Plan, and operating capabilities of various Venezuelan national oil industry’s which contemplates the addition of 42 Brazilian shipyards, the legal terms standards. new tankers to strengthen the 21 unit PDV fleet currently in service Iranian company to buils 4 tankers for PDVSA In this direction, Diques y Astilleros Nacionales, C.A. (DIANCA), the Eisa PDV Marina also signed a contract and Maua Jurong Brazilian shipyards with representatives of Iran Marine and PDV Marina signed a contract Industrial Company (SADRA) for the to cover the building of 10 tankers: 8 purchase of 4 tankers of 105,000 Panamax type 70,000 tonners and tons capable of transporting 650,000 2 ships of 47,000 tons each, thereby barrels of crude each, to be built following the Bolivarian government’s according to PDVSA standards. guidelines on reinforcing Venezuela’s By 2012 PDVSA will have a fleet of more than 60 tankers. naval industry.

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INTEGRATION >> President Chávez’s reelection Venezuela invigorates Latin American energy integration

The presidential tour not only strengthened the economic area, but also provided a favorable context for integration In the presidential elections with South American countries in other fields.

of last December 3rd, the articulating the Latin American reserves contained in the Orinoco energy sector and turning the Oil Belt’s Carabobo 1 block, where Venezuelan people voted region into a world power in the oil me managed to add to the 2 billion and gas field. barrels of oil in this area, 7 billion for the continuity of the additional barrels, which provides Integration marches ahead us with excellent prospects to integrationist and social develop and sustain any joint plan”. The Venezuelan head of state projects undertaken by began his international tour with an On the other hand, the national oil official visit to neighboring Brazil’s companies of Venezuela and Brazil the Bolivarian government capital of Brazilia, to meet with extended the validity, until March President Luis Inácio Lula da Silva headed by President Hugo on December 7th, when Petróleos de Venezuela, C.A. (PDVSA) Chávez, both in Venezuela and PETROBRAS signed energy cooperation agreements covering and the rest of Latin joint projects in the Orinoco Oil Belt. America. In the framework of the Venezuelan fter having been elected head of state’s visit to Brazilia, the Aand sworn in for his second Popular Power minister for Energy period at the head of the Bolivarian and Petroleum, Rafael Ramírez, government, President Chávez presented the progress made on undertook, during December 2006, energy matters by both nations. a tour which covered Argentina, In this sense he emphasized the Bolivia, Brazil and Uruguay, to presentation of joint projects, consolidate the integration of especially on “the success President Chávez upon his arrival in Bolivia these countries, with the aim of achieved in the certification of the greeted various representatives of Bolivian arts and culture.

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31st, 2007, of the Letter of Intent for the identification of business opportunities for hydrocarbons in Block 5 of the Deltana Shelf Project.

Progress made in energy sovereignty

The Venezuelan head of state attended the 2nd Summit of South American Nations held on th December 8 in Cochabamba, The Latin American people were present at the Cochabamba Summit to show their support for regional Bolivia, where the guiding integration. principles for integration were determined: solidarity and Great Southern Gas Pipeline: cooperation, sovereignty, respect Petroandina Gas is to build two South American Integration Hub for territorial integrity and self- gas-liquids separation plants determination of peoples, peace, in Bolivia. With an $100 million As part of his December tour, democracy and pluralism, human investment, the South Plant, which President Chávez arrived in rights and harmony with renewable will be built in the province of Argentina with the aim of analyzing and non-renewable natural Gran Chaco, close to the town of the important subject of energy resources. The third Summit will Yacuiba, will have a processing integration with his opposite be held in Cartagena de Indias, capacity of 300 million cubic feet number, President Nestor Kirchner, Colombia, in the course of the per day, producing 3,600 barrels and especially firming up the present year. per day of liquefied petroleum gas creation the Great Southern Gas (LPG) and 854 barrels per day of Pipeline, which he called the South Petroandina Gas was natural gasoline. American alliance’s “backbone”. born in Bolivia Among the joint projects to The North Plant, to be built in be developed with Argentina Among the most important Central Bolivia, in a site adjacent to aimed at strengthening bilateral issues discussed in the context the Río Grande, will initially process relations were the evaluation of of the Summit was the creation 200 million cubic feet of gas per the La Raza refinery purchase, of the Petroandina Gas mixed day, to produce 3,570 barrels per the building of tankers (the first of company, made up by PDVSA and day of LPG and 587 barrels per day which is to be named Eva Perón) Yacimientos Petrolíferos Fiscales of natural gasoline, and require a and the financing of the Sancor Bolivianos (YPFB), in which Bolivia $70 million investment. The start-up Cooperative, which will repay will be the majority shareholder, of both plants has been planned for Venezuela’s loan with powdered thereby fulfilling the commitment the first quarter of 2008. milk and technology transfer. made by presidents Hugo Chávez and Evo Morales in May 2006.

Cochabamba Declaration

First South American Energy Summit to be held in Venezuela During the meeting, President Chávez agreed to in December 2006, will be held in proposed the inclusion of Petrosur as an the month of April in Venezuela. Venezuela is to be the venue of the first initiative to materialize South America’s South American Energy Summit to continue energy union, together with the creation Energy integration commission building unity in the region, using energy of a strategic fund to finance development as the cornerstone. This was agreed to programs. The presidents also agreed to the creation by the presidents and heads state in the of a Senior Officials Commission to delve Cochabamba Declaration signed at the end of Later, after the 31st Summit of Mercosur further into regional integration. One of the the 2nd Summit of South American Nations, heads of state, President Chávez announced action fronts to be covered is the energy which took place in Bolivia in December 2006. that the first South American Energy Summit, area.

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BUSINESS >> Fitch Ratings CITGO credit rating raised at the end of 2006

The evaluation was carried out by Fitch Ratings, a US credit evaluation agency, and confirms PDVSA’s financial strength and that of its subsidiary companies. It equally confirmed CITGO Petroleum Corporation’s leadership position in the US refining field.

itch Ratings raised its its owner, the Bolivarian Republic of by the CITGO-Lyondell joint venture, Fclassification for CITGO Venezuela. At the closing of financial the Bolivarian Republic of Venezuela Petroleum Corporation of ‘BB-’ to 2006, CITGO had paid PDVSA one received $1,314 million, which are ‘BB’, due to the strength of United billion dollars, which was $250 million being invested in infrastructure works States refinery margins, the current more than the $750 million it had and well-being for all Venezuelans. high market valuations for refinery paid in 2005. This income is being assets and the competitive position of used to boost Venezuela’s integral CITGO is one of the largest the PDVSA subsidiary, whose refinery development projects aimed at independent crude refiners in the network has high-conversion facilities ensuring that all its inhabitants have United States. The fuels it produces to process heavy crudes . equal access to education, health and under the CITGO brand are marketed work skills training. by over 12,000 point of sale, owned The strength of CITGO’s financial and operated by independents. position is further reflected in the Similarly, with the sale of its 41.25% value of the dividends returned to share in the Houston refinery owned

Heating Oil Program continues

During November CITGO Petroleum York alone, and more than 100,000 families

Corporation, together with Citizens will benefit from a 40% discount in their

Energy Corporation, a non-government heating bill.

US organization, resumed the Heating Oil

Program made available under special The CITGO Heating Oil Program currently

financing conditions, for the 2006-2007 operates in Alaska, Connecticut, Delaware,

winter season. Its aim this time is to the District of Columbia, Indiana, Maine,

distribute more than 100 million gallons of Maryland, Massachusetts, Michigan, New

heating oil among more than 400,000 needy Jersey, New York, Philadelphia, Pittsburgh,

homes in 18 States of the Union, thereby Rhode Island, Vermont, Virginia and

surpassing the totals achieved last year. Over Wisconsin. CITGO also supplies discount fuel The CITGO Heating Oil Program directly benefits 163 native American tribes in Alaska, Maine, 25 million gallons will be distributed in New directly to 163 native American tribes. Minnesota and New York.

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BUSINESS >> New integration model PDVSA to refine 100,000 bpd of Ecuadorian crude starting this year

The president of the Bolivarian Republic of Venezuela, Hugo Chávez, stressed that Venezuela’s refineries were available to process Ecuador’s hydrocarbons.

The Venezuelan head of state presents a replica of the Liberator’s sword to Ecuadorian president ome 100,000 barrels of Napo Rafael Correa, as a gesture of solidarity and union among peoples. Stype Ecuadorian crude will be processed in Venezuela’s refining have lived over the past 20 years the hydrocarbons area that will enable circuit, beginning on February 1st imposed on us by neo-liberalism; Ecuador to arrive at agreements which 2007, according to the announcement when they tried to turn us not into safeguard the country’s interests, made by President Hugo Chávez nations, but simply into markets; when together with the review of existing during the first official visit of they tried to turn us not into citizens, commitments, in order to find optimum Ecuadorian President Rafael Correa, but simply into consumers, is being formulas for them, in defense of the recently elected as his nation’s head definitely overcome by the peoples of Ecuadorian nation’s best interests. of state. Latin America.” On the other hand, Venezuela “What we are going to do is to Petroandina will provide will exchange with Ecuador all of lend Ecuador the available installed the platform the experience acquired in the capacity we have in our refineries, oil business, personnel training close to 100,000 barrels per day. We Through instructions issued by the and technology development in will bring the crude here, refine it, and respective heads of state, PDVSA exploration, production, transport, they will carry away the products, and PETROECUADOR will begin storage, processing and marketing of paying solely for the transformation studies to revamp and expand the Las oil and gas. cost and not a cent in profit because, Esmeraldas refinery in Ecuador and, at what would our help then be ?”, the same time, evaluate the possible President Chávez asked. construction of a new refining center in the country. All of these energy President Rafael Correa in turn gave cooperation agreements come under thanks that “this long and sad night, the Venezuelan proposal known as dense and dark, through which we Petroandina, a platform for the region’s energy integration. President Chávez Full oil sovereignty in Ecuador “We look forward to Ecuador’s early entry into the Orinoco Oil Belt”, The joint declaration signed by President Chávez said, who reminded the presidents of Ecuador and his audience that PDVSA’s doors were Venezuela instruct PDVSA to provide open to all Latin American state-owned counseling and assistance in setting oil companies. up sovereign commercial policies in

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UNION OF PEOPLES >> Venezuela and Malaysia sign joint declaration South-South energy cooperation expanded

President Hugo Chávez receives Malaysian Prime Minister Dakut Seri Abdullah Ahmad Badawi

s part of the agreements reached activated, creating a strategic alliance Both companies will hold a meeting Aby the president of the Bolivarian based on the principles of solidarity in Kuala Lumpur during the first Republic of Venezuela, Hugo Chavez and complementarity promoted by the quarter of 2007 for the purpose and by the prime minister of Malaysia, Venezuelan government. of studying the agreements that Dakut Seri Abdullah Ahmad Badawi, contemplate Malaysia’s participation Petróleos de Venezuela (PDVSA) Prime Minister Badawi remarked on in the quantification and certification and Petroliam Nasional Berhad the results obtained from his visit to of the reserves present in Boyacá (PETRONAS) signed a joint declaration Venezuela. “I am absolutely certain Block 5 of the Orinoco Oil Belt, the for the development of four energy that the various documents will be world’s largest hydrocarbon reserve, projects by both countries. developed by the representatives from as well as the construction of a high both sides, private enterprise and the conversion refinery in Malaysia. The Venezuelan president people (…) for the good of Venezuela underlined the strategic importance and Malaysia of the declaration. “This alliance is very appropriate when we are Malaysia will operate in the Belt commemorating the 20th anniversary and in the Gulf of Venezuela of the start of relations between the two countries. We should remember The document on energy matters that Malaysia is southeastern Asia’s signed by the Popular Power Minister third economy and that we share for Energy and Petroleum and an international vision, the Group of President of PDVSA, Rafael Ramírez, 15, and the Non-Aligned Movement, and the President of PETRONAS, seeking to strengthen South-South Mohd Hassan Marican, includes a integration” feasibility study on the four broad

projects throughout the hydrocarbons Venezuela’s Popular Power minister for Energy With the joint declaration the value chain. and Petroleum greets Prime Minister Dakut Seri cooperation mechanisms become Abdullah Ahmad Badawi.

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Orinoco Oil Belt’s Boyaca Block 5

• Plant for the extraction of raw Orinoco Oil Belt palm oil Carabobo • Palm oil refinery Junín • Biodiesel plant Boyacá 1 Ayacucho 1 6 4 Orinoco Oil Belt 1 3 5 1 2 5 5 7 2 3 Through the 2006-1012 Sowing the 1 4 2 Oil Plan’s Magna Reserva Project, 6 4 2 3 4 6 3 Petróleos de Venezuela has begun Orinoco River 7 8 the processes associated with the quantification and certification of the hydrocarbon reserves found in the Orinoco Oil Belt. The quantification MALAYSIA (Petronas) study in question is being carried out by PDVSA, together with international With an extension of 1,250 square kilometers, Palm oil and biodiesel company teams, while the certification it contains reserves estimated at 35 billion PDVSA signed a letter of intent with Golden will be undertaken by independent firms barrels of oil. The gravity of the crude is Hope, a Malaysian company with wide recognized worldwide. approximately from 5º to 8º API; which is to experience in plantation management and say, extra-heavy crude related research and development, to draw-up The Orinoco Oil Belt covers an area of some an agricultural and industrial project for palm 55,000 square kilometers. The area has been The declaration signed also foresees a study on oil production in Venezuela that can be inserted divided into four great fields: Boyacá, Junín, the quantification and certification of Urumaco into the biofuels development projects currently Ayacucho and Carabobo, which in turn are Block 3 of the Rafael Urdaneta Project in the being undertaken by the Venezuelan national segmented into 27 blocks, ranked according to Gulf of Venezuela, and the creation of mixed oil company technical and strategic characteristics. company to explore opportunities in the oil and gas sector on an international scale. The document contemplates: • Construction of the palm oil plantation Venezuela and Iran to develop offshore activities

he Venezirian Oil Company is the so that the alliance will provide Tnew mixed enterprise founded by Venezuela with proven technological Phase 1: Construction of semi- Corporación Venezolana del Petróleo, know-how, while using Venezuelan submersible and jack-up units in the a PDVSA subsidiary, and the Iranian labor, which should accelerate the Islamic Republic of Iran. company Sadra América Latina C.A. installation and start-up of the new gas Phase 2: Construction of blocks in Iran for the development of projects related developments, the majority of which and subsequent assembly of the semi- to offshore exploration and production are to be found offshore. submersible and jack-up rigs in the Bolivarian Republic of Venezuela activities. Phase 3: Construction and assembly Venezirian aims to provide engineering, of offshore equipment in Venezuelan CVP president Eulogio Del Pino stated construction, reconstruction and repair territory. that the Iranian partner had wide services, as well as other activities experience in marine oil installations, related to offshore semi-submersible and jack-up drilling rigs and production Benefit for the communities structures. It will also ensure the transfer of technological knowledge to Mixed companies devote 1% of their PDVSA. before-tax profit to endogenous and

sustainable social development projects The new Venezuelan-Iranian company, that are part of the 2006-2012 Sowing with headquarters in Caracas, will undertake the services mentioned in the Oil Plan. three phases:

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PDVSA in figures 2005* PDVSA and CNPC advance in energy agreements signed Proven Reserves

Crude Oil 87,6 Bn MB In the context of the World Conference Gas 150,4 TCF On Heavy Crudes, held recently in Beijing, Venezuela’s Production Capacity

Petróleos de Venezuela (PDVSA) and China Crude Oil 3,7 m BPD

National Petroleum Corporation (CNPC) held Gas 6.900 BCFD

a follow-up meeting on the Memorandum of LNG 250 m BPD

Understanding signed for the setting up of Refining Capacity mixed company to operate in the oil services Domestic 1,3 m BPD

area for exploration and production wells, International 2,0 m BPD

as well as the development of equipment for Total 3,3 m BPD operations on land and offshore. Total Renevues

85,3 B$US PDVSA Exploration and Production vice-president Luis Vierma stated that “the * Preliminary Figures

creation of China-Venezuela mixed companies will have the aim of reducing Glossary TCF: Trillions of cubic feet MBD: Millions of barrels a day technological dependence, increasing national content in goods and services CF: Cubic feet MCFD: Millions of cubic feet a day B$US: Billions of US Dollars of the oil industry, within the Bolivarian Government of Venezuela’s geopolitical orientation.” Quote of the month Energy Revolution Mission incandescent bulbs for their modern continues forward energy-saving alternative. During 2006 we advanced notably“ in the expansion of our Approximately 52 PDVSA guarantees transparency in policy of international solidarity, million energy- supply-contract tenders through the structuring and saving light bulbs consolidation of Petrocaribe with will be installed at Petróleos de the presidential decision on the no charge in six Venezuela states in Venezuela announced that it construction of the Great Southern as part of the Energy Revolution had created two Gas Pipeline, through cooperation Mission’s pilot plan, an initiative that is high-level permanent agreements and solidarity expected to translate into savings of committees with exchanges with Africa, Asia and, 2,000 megawatts, equivalent to US$ 2 the aim of reviewing the processes even, the United States, by means billion. The Energy Revolution Mission associated with the tendering of export of heating oil donations to various has as its objective the development supply contracts in order to guarantee underprivileged communities of a strong awareness campaign maximum transparency in this type of ” and follow-up on the effectiveness operations, adhering strictly to internal of energy saving in the country, rules and to the laws of the Bolivarian Hugo Chávez Frías President of the Bolivarian Republic of Venezuela by substituting the conventional Republic of Venezuela.

OPERATING CRUDE OIL GAS REFINING EXPORTS OIL BASKET PRICE INDICATORS 3,3 MM 6,9 MMM 1,2 MM 2,7 MM 50,50 $ First Half 2006 Averages barrels a day cubic feet a day barrels a day barrels a day per barrel (Vzla/Island loop)

14 The New PDVSA Contact • January 2007 The New The New PDVSA PDVSA Contact Contact

BUSINESS >> In El Salvador PDVSA positions PDV lubricants in Central America

Petróleos de Venezuela forges closer ties with Alba Petróleos of El Salvador for the supply of Venezuelan fuels in that Central American nation

he mixed company made up by Tthe PDV Caribe subsidiary and Energía para El Salvador (Enepasa),

an association of municipalities, will El Salvador joined the group of countries that benefit from the Petroamerica Energy Cooperation Agreement. market PDV branded products in that added. For the storage of these fuels, country through a lubricants supply Venezuelan lubricants are marketed in the construction of a tank farm has contract signed by PDVSA and Alba various Latin American and been foreseen for the port of Acajutla, Petróleos de El Salvador. Caribbean countries, such department of Sonsonete, in western as Trinidad and Tobago, El Salvador Guyana, Guatemala, Cuba, The 27-product range for automotive, Belize, Surinam, Nicaragua, marine and industrial applications that Payment for the lubricants mentioned Costa Rica, Dominican will be exported to the country are the will benefit from the credit facilities Republic, Colombia, Ecuador, first form of a commercial barter, to contemplated in the Petrocaribe Brazil, Bolivia, while their introduction which the distribution of fuels will be Energy Cooperation Agreement, with into new markets in the region is being

payment of 60% of the invoice in 60 planned.

days, and financing of the remaining

40% over 23 years at 1% interest, with economy, considering that it

two years’ grace. represents savings in intermediation

costs, besides the possibility of Energy savings for El Salvador paying in products that are useful for

Carlos García, who is also the acting the Venezuelan market.” The step

president of Enapasa, stated that will translate into greater market

The 27-product range to be introduced into the “the agreement provides a powerful diversification for PDVSA. Salvadorian market will also represent savings in marine, automotive and industrial applications. support to boost the Salvadorian

The New PDVSA Contact • January 2007 15 The New PDVSA Contact

GNV >> Initial phase extends to 2010 PDVSA commited to environmental preservation For the purpose of contributing to safeguard the habitat and observing the international environmental protection standards currently in force, PDVSA is reactivating its Natural Gas for Vehicles program

Natural Gas for Vehicles offers gas service stations in the country, the a cleaner combustion process; installation of 500,000 GNV conversion The drivers of automotive vehicles will now have gas it releases neither ash nor solid units in heavy and light public as a new option, when the time comes to fuel up at the service station. particulates into the atmosphere, transport, as well as the conversion of it produces minimal emissions of official automotive fleets. etróleos de Venezuela (PDVSA) nitrogen oxides (NOx), carbon dioxide is relaunching its Natural Gas for P (CO2), carbon monoxide (CO) and Vehicles (GNV) program complying reactive hydrocarbons; it generates

with international safety standards and virtually no sulphur dioxide (SO2). environmental protection to guarantee a cleaner fuel system that will have The establishing of the Natural Gas a positive impact on the Venezuelan program will begin with a first stage people’s quality of life. which will cover the refurbishing and Natural gas improves automotive performance and extends the useful life of engines reactivating of the 148 existing natural

INTEGRATION >> XXIV Havana International Fair PDVSA exposed its achievements in Cuba etroleos de Venezuela again Fair, which took place from 30 October and public- that represented various Ppresented examples of its to 3 November 2006 at the capital’s industrial areas in the country’s achievements in energy integration in Expositions Pavilion (Pabexpo), with pavilion. The PDVSA exhibition module Cuba, at the XXIV Havana International the aim of divulging the advances also presented a sample of the PDV made in Latin brand of lubricant being marketed on American the island. integration and in the “sowing of The PDVSA exhibition module the oil”. reflected the targets reached within the framework of the 2006-2012 PDVSA was Sowing the Oil Plan, especially with one of the 65 regard to the deepening of the social Venezuelan missions, a manifestation of the The Havana International Fair represents a very important space in which to promote the integration of peoples, based on the Bolivarian Alternative for companies - Corporation’s commitment to the new America (ALBA). both private Venezuela.

The New PDVSA Contact is a Petróleos de Venezuela, S.A., publication produced by the Corporate Office of Public Affairs. Caracas, Venezuela. Fax: +58 (212) 708.4460. Questions and suggestions: Daniel Cortez, International Communications Manager • e-mail: cortezd@.com Graphic Design: Contacto Comunicación Estratégica. Photographs: PDVSA Archive. Legal deposit: lf13820053502083. Distribution without charge. This publication may also be viewed on our website: www.pdvsa.com

Bolivarian Government Popular Power Ministry of Venezuela for Energy and Petroleum 16 The New PDVSA Contact • January 2007