UPDATE: Venezuela Acquires ConocoPhillips Gas Stake

Venezuela state oil firm Petroleos de Venezuela said Friday it has completed a previously announced plan to acquire ConocoPhillips' (COP) stake in a natural gas joint venture project with Chevron Corp. (CVX).

"The transfer of these rights allows for the creation of a joint venture firm for the production of natural gas, with PdVSA holding a 61% majority stake, and Chevron 39%," PdVSA said in a statement.

Charlie Rowton, a spokesman for ConocoPhillips, confirmed the sale of its stake to PdVSA, but said it wasn't disclosing any other terms of the deal.

The PdVSA-Chevron joint venture is for the Block 2 portion of the multi-block Deltana offshore project, located in a continental shelf extension of the Orinoco River delta along the country's eastern coast.

PdVSA officials said last year it planned to take over ConocoPhillips' stake and that the U.S. company would no longer be involved in these natural-gas ventures since it is now involved in arbitration proceedings with PdVSA.

Houston-based ConocoPhillips, the U.S.'s third-largest integrate energy company, filed for arbitration against Venezuela last year, seeking compensation for the state takeover of other assets in the Orinoco river basin.

In Friday's statement, PdVSA said it "only recognized audited real expenses realized during the exploratory phase," which it said has been the model used for compensations. PdVSA also didn't mention a dollar figure or any plan for compensation.

PdVSA said ConocoPhillips and Chevron had begun exploring the block in 2003 and said it found more than 7 billion cubic feet of gas reserves.

The joint venture with Chevron is expected to produce 750 million cubic feet of gas a day, PdVSA added.

Venezuela has taken over many privately owned firms, foreign and local, as part of President Hugo Chavez's efforts to transform the country's economy into a "21st Century Socialism" model.

-By Dan Molinski, Dow Jones Newswires; 58-212-284-5651; [e-mail]