By Curtis Williams, www.guardian.co.tt

Venezuelan President Hugo Chavez has announced that Chevron Texaco has discovered 5 trillion cubic feet of natural gas in the Loran field which runs into T&T's waters.

Chavez also revealed that his government had signed two deals with Chevron Texaco and Repsol to increase the amount of natural gas produced in Venezuela.

He said the Loran discovery would speed up Venezuela’s ability to build its own LNG plant since it provided evidence that there was enough gas to proceed.

The Loran field runs into the Manatee Block on the Trinidad side of the border in which British Gas is the operator with Chevron Texaco also having a stake. Manatee being considered the Northern extension of Loran.

No well has been drilled on the Trinidad side of the border but pre-drilling data suggest there is also significant gas on the Trinidad side.

British Gas was intitially chosen by the Venezuelan government as the operator of the loran field.

At that time the Chavez administration indicated that it made sense to have the company operating on the Trinidad side also operate on the Venezuelan side since the fields had to be produced jointly.

However British Gas turned down the offer after what it said was the political instability in the South American country and contradictions with its own business plan.

It is understood that British Gas wanted assurances from the Venezuelan government that the gas would be sent to Trinidad for liquefaction at the Atlantic LNG in which British Gas is the second largest shareholder.

However, Venezuela was not willing to give those assurances, and BG pulled out.

Venzuela’s ambassador to T&T Hector Azocar told the Guardian that there is still no final decision where the gas will go since domestic demands will have to be satisfied before gas is exported.

He said: "We have always said that our local demand will have to be met before any consideration could be given to the export of natural gas and as you know Venezuelan energy based companies use a lot of natural gas and so we have to ensure that there is enough gas."

Azocar also admitted that some of the gas from the Plataforma Deltana area may have to be used for domestic industries a departure from what was intitially contemplated by the Venezuelan government.

Chevron Texaco will not be able to produce its gas unless there is an agreement between the Venezuela and T&T governments on how it is going to produced and the size of the reservoir.

Azocar said the cross border negotiations between the two countries is progressing with the two countries having appointed their various technical committees.

He said: "We have set up a steering committee and three months ago the technical committee was also established and are doing their work. However, I have been told that even though I am the ambassador I am not in a position to speak on the progress of the negotiations. This has been reserved for the chairmen of the steering committees."

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