JULY 23, 2009, 2:43 P.M. ET

By Dan Molinski
Of DOW JONES NEWSWIRES

CARACAS (Dow Jones)--A Tuesday deadline for companies to submit bids in a tender for Venezuela's Carabobo heavy crude blocks appears likely to be pushed back, although no official postponement has been announced.

Officials at Petroleos de Venezuela, PdVSA, weren't available to comment on whether the July 28 deadline for final bids, set in April, still stands. But industry observers in Caracas say it has probably been delayed amid a series of issues, not least of which is less-enthusiastic interest by petroleum companies amid lower oil prices, a weak global economy and Venezuela's tricky regulatory environment.

Still, 19 oil companies met with Venezuela's oil minister several months ago to discuss possible bids for the three blocks, which are located along the Orinoco river belt, the richest piece of oil real estate in the country.

The tender is the first major investment opportunity in Venezuela for foreign oil firms in several years. The country's outspoken president, Hugo Chavez, has been taking strong steps against foreign oil firms in recent years, first unilaterally changing contract terms and then nationalizing much of the industry as he moves Venezuela toward what he calls 21st century socialism.

But Chavez has also made it clear he is willing to take a pragmatic approach toward socialism, and the new bidding round suggests that he thinks a degree of foreign investment and technology can keep production steady, boost revenue and allow him to keep spending on programs for the poor.

"The level of Chavez's ideological rigor varies depending on the price of oil and his needs," said Christopher Sabatini, senior director of policy at the Council of the Americas in New York.

One problem with the Carabobo project seems to be that a cloud of mistrust is hanging over it. PdVSA has been dragging its feet on paying foreign firms for assets Chavez seized as part of the nationalizations, and companies, though enticed by potential profits from Carabobo, are uncertain about making deals with the Venezuelan government.

As a result, analysts say foreign firms want any Carabobo contracts to stipulate that both sides will accept international arbitration to settle disputes that may emerge.

PdVSA has been reluctant, saying such arbitration would diminish Venezuela's sovereignty. But observers say PdVSA has agreed to similar clauses in other cases, including contracts it has inked with Russia.

PdVSA officials weren't immediately available to confirm or deny this. But a recent report in a local newspaper suggests PdVSA is trying to reach a middle ground with foreign firms on the arbitration question.

According to El Universal, Oil Minister and PdVSA chief Rafael Ramirez said the company would allow for an arbitration clause on certain parts of the contract, but what exactly it would cover remains unclear. He said it would allow oil companies to get bank loans, given that banks require the arbitration clause.

Among the firms considering bids for the Carabobo blocks are France's Total SA (TOT) and state oil giant China National Petroleum Corp., according to people familiar with the situation, as well as Brazilian state-run energy giant Petrobras (PBR) and a consortium of Russian oil and gas companies.

Also interested are Spain's Repsol YPF SA (REP) and Portugal's Galp Energia SGPS SA (GALP.LB), and the local units of Royal Dutch Shell (RDSA.LN), StatoilHydro (STO), BP Plc (BP) and Chevron Corp. (CVX).

Companies selected would join PdVSA in two joint-venture companies where foreign partners would own as much as a 40% stake.

The Carabobo plan calls for each field to yield at least 200,000 barrels of oil a day that would be processed in two new upgrading facilities planned for 2014. Ramirez has said he expects these fields each to generate at least 100,000 barrels a day in a matter of two years, several years before the upgraders come online.

-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com