PDVSA and Shell announced plans to negotiate new joint venture agreements to increase production from Lake Maracaibo and develop Faja heavy oil. They also confirmed their commitment to progress development of the Mariscal Sucre LNG Project during a meeting in Caracas between the Minister of Energy and Petroleum of Venezuela and Petróleos de Venezuela President, Mr. Rafael Ramirez and Mrs. Linda Cook, Executive Director of the Royal Dutch Shell Group Companies.

In the meeting Mrs. Cook emphasized Shell’s long-term commitment to Venezuela and reinforced Shell’s willingness to work with the Government and PDVSA on oil and gas developments within the framework of the Venezuelan energy policy objectives. Mrs. Cook said, “Shell has been a pioneer in the Venezuela oil industry having drilled the initial commercial wells in the Lake Maracaibo area. We are eager to expand our activities in the country, including the realization of Mariscal Sucre LNG and other oil and gas projects. With the parallel social investment programs that Shell will undertake, we believe these projects can contribute to the sustainable long-term economic development of Venezuela and further strengthen its energy supply capability.

Minister Ramirez stated the willingness by the Ministry and PDVSA to develop further business opportunities with Shell. He reaffirmed Venezuela’s intention to progress the Mariscal Sucre Project for the development of the offshore North Paria gas fields together with Shell, as well as their interest in developing new initiatives.

To that end Minister Ramirez and Mrs. Cook agreed to early conclusion of negotiations to enable investment to begin on the Mariscal Sucre project, and expressed their willingness to create a new joint venture for exploration and production projects in Lake Maracaibo aiming at development of the Urdaneta North Field. Shell is already successfully operating the Urdaneta West Field. Shell and PDVSA are also considering a joint venture for heavy oil production in the Faja using world leading technology developed by Shell. Joint teams are being established to negotiate definitive agreements for these projects by the end of 2005