UPDATE: Venezuela Carabobo Oil Auction Still On - Official

 
  By Dan Molinski 
  Of DOW JONES NEWSWIRES 
 

CARACAS (Dow Jones)--Venezuela's plan to hold a drilling auction for several blocks of heavy and extra-heavy crude in the Orinoco region remains in place despite the government's Friday night announcement that it devalued the currency, an official said.

"The auction is moving forward, it's still on," an official at state-run petroleum company Petroleos de Venezuela, who asked not to be named, said Monday.

The official would not confirm whether the planned timetable for holding the so-called Carabobo auction would remain the same or may be pushed back. The bidding was expected to take place later this month or early in February.

More details could be available later in the day, the official said.

Venezuela on Friday night devalued its currency by half, setting a new fixed rate of 4.3 bolivars for $1, from the previous VEF2.15 for $1. It also set up a secondary official rate of VEF2.6 for $1, which would be used for authorized purchases of imports of essentials such as basic foods and medicine.

Among the companies that have shown interest in presenting a bid in the Carabobo oil auction are U.S.-based Chevron Corp. (CVX), the U.K.'s BP PLC (BP, BP.LN), France's Total S.A. (TOT, FP.FR), Norway's Statoil ASA (STO, STL.OS) and Chinese state oil firm CNPC (0135.HK).

The auction is considered the most important drilling project in oil-rich Venezuela in more than a decade and the blocks up for bidding could produce a total of 1.2 million barrels a day.

Winning bidders would set up joint ventures with PdVSA, with PdVSA holding a 60% stake and the company or consortium of firms retaining the other 40%.

Analysts said they don't expect the devaluation itself to cause any serious delays in the auction, which has already been delayed numerous times amid lower oil prices that has spurred questions over royalties and tax rates.

The government delivered the final conditions late last year and now are waiting for the companies as they prepare to submit bids in a few weeks.

"So the ball is in the companies' court," said Patrick Esteruelas, an analyst with Eurasia Group, a political-risk consultancy. "If there were going to be delays (related to the devaluation), it would probably have to come from the oil companies."

-By Dan Molinski, Dow Jones Newswires; 58-212-284-5651; dan.molinski@dowjones.com

 Anyone have a feel for how the major players will react to the current situation?