* In overture to US, Ramirez has 1st talks in DC in 6 yrs
* More OPEC output would end up in inventories-oilmin
* Oil market speculation causing current oil price-oilmin
(adds comments from Latin America analyst)
By Timothy Gardner and Tom Doggett
WASHINGTON, April 15 Venezuelan Oil Minister
Rafael Ramirez on Thursday welcomed investment by U.S. oil
companies to help develop his country's vast crude reserves, as
he held energy talks in Washington for the first time in six
Ramirez said Venezuela is signing agreements with companies
in Russia, China, Europe and Japan to develop its reserves and
U.S. companies should be there as well.
"This United States cannot miss this opportunity," he told
reporters on the sidelines of a two-day conference of Western
Hemisphere countries meeting to address energy and climate
Relations between the United States and Venezuela have long
been strained, hitting a particularly low point in 2006 when
visiting Venezuelan President Hugo Chavez took on
then-President George W. Bush at the United Nations, calling
him a "devil."
Ramirez said foreign oil companies wanting to do business in
Venezuela would have to "respect" the country's energy laws and
Venezuela has an estimated 99.4 billion barrels of proven
oil reserves, with last year's oil production averaging 2.2
million barrels per day, down 190,000 bpd from the year before.
It is the world's eighth largest oil exporter and the fourth
biggest foreign oil supplier to the U.S. market.
MONEY NEEDED TO TAP "HEAVY OIL"
To boost its sagging output from traditional wells,
Venezuela needs foreign investment and technology to tap the
heavy oil of the Orinoco belt that requires much upgrading to
turn into lighter crude.
Venezuela was criticized several years ago when it forced
foreign companies to renegotiate their oil development
contracts, reducing their profits. Several companies, including
those U.S.-based, sold their stakes instead of following the
Venezuelan government's new terms.
Leading U.S. oil companies Exxon Mobil (XOM.N) and
ConocoPhillips (COP.N), left Venezuela in 2007 after being
pushed out of multibillion-dollar Orinoco projects.
Before Thursday, Ramirez had not held energy talks in
Washington since 2004. He said Venezuelan-U.S. relations had
been hurt by the Bush administration, which he said had been
"hostile" to his country.
"There's no reason whatsoever for this relationship to have
been halted," he said. Ramirez said he expected to have a
private meeting with his U.S. counterpart, Energy Secretary
Steven Chu, during the conference.
Patrick Esteruelas, Latin America analyst at Eurasia Group
in New York, said he did not think Ramirez's comments about
U.S. firms was significant because Venezuela has not
discriminated against companies from specific countries.
"It has just demanded an equally aggressive share of the
(oilfield) rent from all willing investors...very few U.S.
companies have shown much willingness to go in and swallow that
pill," he said.
MORE OPEC OIL NOT NEEDED
On oil market issues, Ramirez said OPEC will not increase
petroleum output to bring down oil costs, even though crude
prices have been hovering near 18-month highs.
Global oil inventories are "very high" because demand is
low, Ramirez said. Any additional output from the Organization
of the Petroleum Exporting Countries would end up in
inventories rather than satisfying consumer demand, he said.
"As long as there is no robust increase in demand there will
be no increase in supply," said Ramirez.
Oil prices settled near $86 a barrel on Thursday on strong
economic data from China, a weaker dollar, and an unexpected
drop in U.S. crude inventories. [O/R]
Ramirez side-stepped questions about whether oil prices
above $80 to $90 per barrel would hurt global economic growth,
saying that high prices were caused by market players betting
on the price.
"The current price is result of speculation in oil markets,"
Current prices are stronger than the $70 to $80 range that
OPEC ministers said last month is good for both producers and
(Reporting by Timothy Gardner and Tom Doggett; Editing by
Lisa Shumaker and Bob Burgdorfer)