Argentina, Venezuela to explore Falklands oil

Venezuelan state oil giant PDVSA is in talks with Argentine counterpart YPF to conduct oil and gas exploration around the Falkland Islands, the company\'s president was quoted as saying Sunday. \"We discussed the need for oil and gas exploration in the territory and offshore areas, adjacent to the Falklands, but we have to analyze the costs and time,\" PDVSA\'s Rafael Ramirez Carreno told Argentine newspaper Pagina12. The executive said he had spoken with the president of YPF, Miguel Galuccio, in Buenos Aires on Wednesday. Argentina announced in April it was taking control of YPF, seizing a 51 percent stake from Spain\'s Repsol, a decision cheered by Venezuelan President Hugo Chavez. The Falklands, a remote but disputed group of islands, was the object of a brief but bloody war between Britain and Argentina in 1982. Tensions over the islands have heated up over the past year, the 30th anniversary of the conflict, intensified in part by British moves to open waters around the Falklands to oil exploration. Carreno said the prospective investments in Argentina are the result of joint ventures in Venezuela between the two South American countries. \"We have a field in the (Venezuelan) Orinoco (Heavy-Oil) Belt, which produces 130,000 barrels a day,\" he said. \"We will increase that production to 160,000 barrels and develop another field, which would produce another 200,000 barrels.\" The Orinoco Belt is an area of 21,357 square miles (55,314 square kilometers) in the east of the country that has some 235,000 million barrels in proven reserves. Carreno said Venezuela is \"proceeding with caution\" after a warning by Repsol to companies that partner with YPF after the expropriation of its shares. \"We reserve the right to take legal action against any investor in YPF or its assets that have been illegally expropriated from Repsol,\" company spokesman Kristian Rix told AFP in April, without elaborating. \"Repsol should think carefully before attempting to attack YPF,\" Carreno countered. \"We are not threatening anybody. What we are doing is being consistent with our approach, and we are not going to trample over the Argentine company.\"