Venezuela: Billion Dollar Financing Granted For Venezuelan Oil Project
Last Updated: 10 August 2001

Petróleos de Venezuela, Phillips Petroleum Company and Texaco Inc. successfully obtained funding in the amount of 1.1 billion dollars for the extra-heavy oil exploitation project to be developed in the Hamaca region of the Orinoco Oil Belt, situated in the southeastern region of Venezuela.

The association agreement between these oil companies, authorized by Article 5 of the Nationalization Law, was entered into in 1997 and, since 2000, the process of locating funding had been underway. Venezuelan Law Firm Torres Plaz & Araujo acted as local counsel in all matters pertaining to the legal framework applicable to the financing, the largest ever granted for a private business venture in Venezuela. The project has been given the classification of "investment grade", from both Moodys Investors Service and Fitch Inc.

The amount to be financed by foreign banking entities will be designated to cover investments in the areas of transportation and upgrading of the plants used to produce a mid product for exports, which will increase crude production by approximately 210 thousand barrels per day.

The operations stage of the project is expected to begin in 2003 and to have a duration of 35 years.

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