Italy’s Eni to invest $4bn in Venezuela

[Judi Lynn]

Italy’s Eni to invest $4bn in Venezuela
By Ed Crooks and Megan Murphy in London

Published: February 29 2008 22:14 | Last updated: February 29 2008 22:14

Eni, the Italian oil and gas group, plans to invest $4bn in Venezuela, making the biggest commitment by a western oil company since President Hugo Chávez began to take control of the country’s oil projects in 2005.

Eni has reached agreement in principle with PDVSA, Venezuela’s state-owned oil company, to develop an area of the Orinoco belt – on some measures the world’s largest oil reserve.

The investment would expose Eni to the risk of further expropriation by Mr Chávez, while giving it access to Venezuela’s huge reserves ahead of its European and US competitors.

Paolo Scaroni, Eni’s chief executive, and Rafael Ramírez, Venezuela’s energy minister, were expected to sign the deal in Caracas last night, in the presence of Mr Chávez and Massimo D’Alema, Italy’s foreign ­minister.

The deal is the most concrete sign yet of Venezuela’s enthusiasm for foreign investment to revive its ailing oil industry.

More:
http://www.ft.com/cms/s/0/038d272e-e6fa-11dc-b5c3-0000779fd2ac.html?nclick_check=1

[Judi Lynn]

1. Venezuela, Italy's Eni to explore heavy oil block

Venezuela, Italy's Eni to explore heavy oil block
Fri Feb 29, 2008 7:36pm EST

CARACAS (Reuters) - Venezuela and Italian oil company Eni (ENI.MI: Quote, Profile, Research) signed an accord on Friday to certify reserves in a block in the vast Orinoco heavy oil belt.

State oil company PDVSA and Eni said the "Junin 5" block, which has potential reserves of more than 2.5 billion barrels, could turn into a project with output of 300,000 barrels per day in 2014.

"It's a very important operation. Something of this kind changes Eni's profile both in terms of production and ... reserves," Eni Chief Executive Paolo Scaroni said, adding investment in the project could be more than $10 billion.

Eni currently has 7 billion barrels of proven reserves, he added.

The cooperation accord, televised live on state TV, came on the same day as Venezuela fought a legal battle in London with Exxon Mobil (XOM.N: Quote, Profile, Research), which won a $12 billion assets freeze after Venezuelan President Hugo Chavez drove the U.S. company from the Orinoco.

More:
http://www.reuters.com/articlePrint?articleId=USN2940009020080301