Executive Resume of the Hydrocarbon Services Business Profile (2006)


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Executive Resume of the Hydrocarbon Services Business Profile (2006), edited by the Venezuelan Council for Investment Promotion, CONAPRI
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Executive Resume of the Hydrocarbon Services Business Profile (2006)

  1. 1. Executive Resume HYDROCARBON SERVICES This publication has been made possible with the support of: Camara Petrolera de Venezuela (Petroleum Chamber) Caracas, July 2006 Get the complete version at www.conapri.org Virtual Store
  2. 2. <ul><li>Country Profile: general country characteristics and mining-metallurgical activities </li></ul><ul><li>Legal framework: </li></ul><ul><ul><li>Institutional framework: relevant entities </li></ul></ul><ul><ul><li>Legal instruments: national, sectorial, tax and investment instruments </li></ul></ul><ul><li>International energy environment: </li></ul><ul><ul><li>Worldwide production </li></ul></ul><ul><ul><li>Worldwide consumption </li></ul></ul><ul><ul><li>World market forecast </li></ul></ul><ul><li>Venezuela: Energy context </li></ul><ul><ul><li>Reserves </li></ul></ul><ul><ul><li>Diversified capacity </li></ul></ul><ul><ul><li>Production, consumption and reserves for 1990-2005 </li></ul></ul><ul><ul><li>Public and private production for 1990-2004 </li></ul></ul><ul><ul><li>Oil industry figures for 1994-2003 </li></ul></ul><ul><ul><li>Crude oil exports and production </li></ul></ul><ul><ul><li>State-owned oil company PDVSA’s corporate strategy </li></ul></ul><ul><ul><li>Pdvsa’s plan for 2005-2030 </li></ul></ul><ul><ul><li>Exploration and Production: where and business plan </li></ul></ul><ul><ul><li>Trade, supply and transportation: where and business plan </li></ul></ul><ul><ul><li>Orinoco oil belt: where and Strategic 2006-2012 Plan </li></ul></ul>Table of contents
  3. 3. <ul><li>Oil Services: Opportunities </li></ul><ul><ul><li>Seismic studies </li></ul></ul><ul><ul><li>Geosciences and environment </li></ul></ul><ul><ul><li>Specialized technical services </li></ul></ul><ul><ul><li>Engineering and integrated services </li></ul></ul><ul><ul><li>Oil and gas production facilities </li></ul></ul><ul><ul><li>Manufacturing of capital goods </li></ul></ul><ul><ul><li>Vendors: commercial strengths </li></ul></ul><ul><ul><li>Construction and assembly </li></ul></ul><ul><ul><li>Production – national capacity </li></ul></ul><ul><ul><li>Machinery and heavy equipment </li></ul></ul><ul><ul><li>Operations and maintenance of facilities </li></ul></ul><ul><ul><li>Associated services </li></ul></ul>Table of contents
  4. 4. COUNTRY PROFILE and legal regime Imagen 6,5” x 5”
  5. 5. <ul><li>No restrictions to participation of private capital, whether foreign or domestic, except in the case of iron, a sector reserved for the state. </li></ul><ul><li>Freedom of repatriation of capital and earnings, following compliance with requirements governing purchase of foreign exchange. </li></ul><ul><li>Signing of international treaties for protection and promotion of foreign investment. </li></ul><ul><li>Value Added Tax exemption for imports of goods and services during the pre-operational stage of mining projects geared towards exports. </li></ul><ul><li>Geographical location favoring access to main markets. </li></ul><ul><li>Participation in a variety of commercial integration arrangements: Andean Community, G-3 and CARICOM, among others. </li></ul><ul><li>(*) Venezuela has given notice of termination of the G-3 Agreement. Customs Preferences will be maintained for at least six (6) months. </li></ul><ul><li>(**) Venezuela has withdrawn from the CAN. Customs Preferences are to be maintained for five (5) years. </li></ul>Advantages available to the investor
  6. 6. Source: Yearbook 2005. Institute of Management Development (IMD). <ul><li>In the past two years, Venezuela has been one of the countries whose economy has demonstrated a high rate of recovery, becoming first country in the world in terms of domestic growth during that period. </li></ul><ul><li>The recovering is reflected on the consumption of the Venezuelan, where food reachs 52% of total comsumption. </li></ul>Advantages available to the investor
  7. 7. Obtain a visa Incorporate the company Register company with tax authorities Register company’s investment Register company with social security agency Register company with INCE Business Visitor’s Visa Investor Visitor’s Visa Decide on type of company Name the company Pay in minimum required capital File with Mercantile Registry Publish incorporation papers Banking Oil and gas Insurance Mining Other sectors Draw up articles of incorporation and bylaws General Legal Framework
  8. 8. Imagen 14,61 x 10,61 International ENERGY ENVIRONMENT
  9. 9. Worldwide production <ul><li>Except for a few years, the Middle East region has been the leader of production worldwide, contributing 31% in 2005, after increasing its production level compared to 2004 by 2%. </li></ul><ul><li>Europe and Eurasia follows with 21,7% of the world total, thanks to major production volumes in Russia, followed by Norway, United Kingdom and Kazakstan. </li></ul><ul><li>In 2005, the weight of total production for the rest was: North America (16,5% ), Africa (12% ) and Asia Pacific (9,8%). </li></ul><ul><li>In South and Central America, which represent 9% of the world’s total production in 2005, Venezuela was responsible for almost half (4%). </li></ul>Source: British Petroleum (BP) thousands of barrels per day North America South and Central America Europe and EuroAsia Middle East Africa Asia Pacific
  10. 10. Worldwide Consumption Source: British Petroleum (BP) North America, principally the United States, is the region that consumes the most, at 24,8 million barrels per day, followed by Asia with 23,9 million barrels per day South and Central America Europe and EuroAsia Middle East Asia Pacific North America
  11. 11. The National CONTEXT
  12. 12. <ul><li>Oil producer of longstanding trajectory </li></ul><ul><li>The largest conventional reserves in the region and the sixth and ninth petroleum and gas reserves in the world </li></ul><ul><li>Currently produces 4% of the world’s crude oil production </li></ul><ul><li>The importance of the industry to the economy </li></ul><ul><li>Know-how in various activities: exploration production refining trading </li></ul><ul><li>Specialized labor </li></ul><ul><li>Participation by the private sector: major foreign and national private companies as well as foreign state oil companies in main as well as related activities </li></ul><ul><li>Major opportunities within the framework of Pdvsa’s Plan, especially the quantification and certification of extra heavy crude oil and bitumen reserves in the Orinoco Belt which it is estimated can add an additional 200 billion barrels </li></ul><ul><li>There are more than 850 service companies waiting to create joint ventures with national and foreign companies to add know-how and increase their operating capacity </li></ul>What does the Oil Industry offer
  13. 13. Diversified capacity Crude oil PRODUCTION Capacity 4 MMBPD REFINING Capacity 3,3 MMBPD ORIMULSION Capacity 6,2 MM Ton / year EXPORTS 2,6 MMBPD PETROCHEMICAL Capacity 10 MM Ton / year COAL Extraction Capacity 7,6 MM Ton / Año Source: Pdvsa
  14. 14. Production, consumption and reserves Source: BP Venezuela produced 2,6 to 3,2 million barrels per day in 2005, whereas it consumed 525 thousand barrels per day. The country contributed 71% of the region’s production and 4% of total world production for 2005, This production has not yet reached the levels obtained in1998.
  15. 15. Oil industry 1994-2003 Source: Ministry of Energy and Petroleum, PODE 34,744 37,460 41,618 41,471 37,350 42,434 40,712 39,406 38,162 32,182 MMM3 Natural gas ** 1,025,508 1,092,806 1,219,746 1,151,436 1,116,705 1,215,120 1,153,400 1,088,850 1,021,635 955,352 MB Crude oil 2,810 2,994 3,342 3,146 3,059 3,329 3,160 2,975 2,799 2,617 MB/D Crude oil * Production 4,245,691 4,171,812 4,199,276 4,179,108 4,155,049 4,150,093 4,120,762 4,051,533 4,064,653 3,964,616 MMM3 Natural gas 77,140 77,154 77,783 77,685 76,852 76,108 74,931 72,667 66,329 64,877 MMB Crude oil Proven reserves 122,2 111,4 100,9 100,8 111,2 97,8 101,2 102,8 106,5 123,2 years Natural gas 70,6 63,8 67,5 67,5 68,8 62,6 65,0 66,7 64,9 67,9 years Crude oil reserves Production 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 Item / years
  16. 16. The energy policy is framed within the Sow the Petroleum Plan encompassing 6 major development projects in two stages, one for 2005-2012 and a later one in 2012-2030. 1 st stage: 2005-2012 Imagen 14,61 x 10,61 <ul><li>Investments in the order of US$ 56,000 MM </li></ul><ul><li>70% shall be contributed by the Venezuelan state-oil operator </li></ul><ul><li>30% shall be operated by the private sector </li></ul><ul><li>Encompasses 6 fundamental pillars </li></ul><ul><li>Magna Reserves </li></ul><ul><li>The Orinoco project </li></ul><ul><li>The Delta Caribe Project </li></ul><ul><li>Refining </li></ul><ul><li>Infrastructure </li></ul><ul><li>Integration </li></ul>Pdvsa 2005-2030 Plan Source: Pdvsa
  17. 17. Investment Opportunities Source: The Oil Chamber
  18. 18. Business Opportunities Within the scope of participation and training of national capital in hydrocarbon projects, Venezuela is promoting: <ul><li>Joint Ventures and Alliances between local and foreign companies </li></ul><ul><li>The establishment of new companies in Venezuela </li></ul><ul><li>Technology transfer agreements </li></ul><ul><li>Cooperation agreements </li></ul>
  19. 19. VALUE CREATED FOR THE SHAREHOLDERS Business Opportunities Foreign Partner Access to the broad Venezuelan oil market and other neighboring markets Local Partner Access to new technologies capacity expansion <ul><li>Growth opportunities, market access </li></ul><ul><li>A good competitive position </li></ul><ul><li>Expansion of the services offered </li></ul><ul><li>and the integration of competencies </li></ul><ul><li>Expanded corporate experience base </li></ul><ul><li>Financial benefits: lower financial risks </li></ul><ul><li>Access to investment capital </li></ul><ul><li>Lower production and operation costs; </li></ul><ul><li>a more efficient use of the resources </li></ul><ul><li>Shared marketing costs </li></ul>Joint benefits
  20. 20. How to contact us Web site htttp://www,conapri.org Phone: +58 212 953 1946 Fax : +58 212 953 3915 Address Calle Guaicaipuro Torre Forum Ground floor, office LC-A, El Rosal Caracas 1060, Venezuela