* Venezuela to award blocks in vast Orinoco oil belt
* Chevron, Repsol said to lead bidding
* Biggest oil investment opportunity under Chavez
* Comes less than three years after nationalization wave
By Brian Ellsworth and Marianna Parraga
CARACAS, Feb 10 (Reuters) - Venezuela was to award the largest oil investment of President Hugo Chavez's 11-year rule on Wednesday, drawing tens of billions of dollars of much-needed foreign finance to the Orinoco Belt just three years after the leftist leader nationalized operations there.
The contest to tap into the OPEC member's 100-plus billion barrels of reserves looks set to be won by groups led by U.S.-based Chevron (CVX.N) and Spain's Repsol (REP.MC), evidence that oil giants are eager to replenish waning reserves that are often under control of producer nations.
Caracas even softened some of the fiscal terms in another sign of dwindling resource nationalism around the world sparked by falling oil prices that have forced producer nations to seek partnerships from companies they marginalized during a five-year commodities boom.
The auction results were to be announced at 6 p.m. (1730 EST/2230 GMT) at Miraflores presidential palace in Caracas.
"It's extremely hard not to see this as a success, especially given the level of risk aversion and the complete lack of private investment in the oil industry in more than a decade," said Patrick Esteruelas, an analyst with Eurasia Group in New York.
Venezuela's Carabobo oil tender includes three projects slated to produce 1.2 million barrels per day following years of slumping oil production in the OPEC nation, though the new facilities may not do much to increase the country's total exports due to declining output at older fields.
The auction's winners will have a major opportunity to gain access the Orinoco region, which the U.S. Geological Survey recently called one of the world's largest crude reserves.
Venezuela itself holds the world's fifth-largest oil reserves at an estimated 100 billion barrels, according to the BP Statistical Review, though the Venezuelan government says it holds at least 177 billion barrels that could yet be produced.
In some cases companies could receive a massive boost in their booked reserves, a key indicator of an oil firm's capacity to continue making money down the road.
But companies face a host of risks including a major financing burden, a massive infrastructure buildout in isolated areas that in some cases have no roads, and the liability that Chavez could launch another wave of state takeovers.
The leftist leader in 2007 took over operations of four Orinoco projects run by private oil companies, leading U.S. giants Exxon Mobil (XOM.N) and ConocoPhillips (COP.N) to leave the country and sue for compensation. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Timeline of oil industry events under Chavez [ID:nN09244390]. Factbox on Carabobo projects, terms of the bid [ID:nN09248426] Graphics link.reuters.com/dud68h
Industry sources say Chevron and Repsol put in bids in rival consortia. Repsol's bidding group also includes India's ONGC (ONGC.BO) and Malaysia's Petronas (PETR.KL).
The sources added the government did not receive bids from several companies Chavez has openly courted. They include China's CNPC; Russian firms such as Lukoil (LKOH.MM) and Gazprom (GAZP.MM); and Shell (RDSa.L), which has proprietary technology for heavy oil production.
This is likely due in part to Venezuela running a parallel process of direct adjudication for blocks in the Junin area of the Orinoco belt that boasts solid reserves but is considered a less attractive production area.
SEPARATE ORINOCO OFFERING
Venezuela offered Junin blocks to Italy's Eni (ENI.MI), China's CNPC and a consortium of Russian companies including Lukoil -- possibly explaining why these companies did not put in offers for Carabobo fields.
Eni and a consortium of Russian companies in recent weeks each agreed to invest close to $20 billion dollars to develop projects in the Junin area.
In the Carabobo auction, Venezuela had to ease its hefty tax burden, which steadily increased during the oil boom years, to convince companies to overlook the risks and put up billions of dollars.
The projects will have production capacity of 400,000 bpd each and will begin output in 2012 or 2013 producing tar-like Orinoco oil and mixing it with lighter oil to create a medium grade similar to Mexico's Maya crude.
By 2016, the companies will build multibillion-dollar upgraders that will turn the oil into light synthetic crude that fetches higher prices on international markets. (Editing by Jonathan Leff and Marguerita Choy)