Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Sept. 11 -- Russia and Venezuela, during Venezuelan President Hugo Chavez's 2-day visit to Moscow, have signed a package of energy agreements, including one to develop the Latin American country's Orinoco belt and its 235 billion bbl of heavy oil reserves.
Venezuela’s state-owned Petroleos de Venezuela SA (PDVSA) signed a memorandum of understanding on cooperation in the Orinoco belt with Russia’s National Oil Consortium (NOC), which includes TNK-BP, Rosneft, Lukoil, Gazprom Neft, and Surgutneftegaz, each holding 20% stake.
A source close to the NOC, which was established in October 2008 to develop oil and gas fields in Venezuela, said initial investment in the infrastructure was estimated at $600 million and that the consortium would probably fund it.
“We agreed on the creation of the Russian [NOC], which will take part in the development of blocks. Oil reserves at the blocks will reach 52 billion bbl, while production will total 450,000 b/d,” said Venezuela’s Oil and Energy Minister Rafael Ramirez.
“There are zones for future development in our country. I hope the Russian consortium, which includes five leading Russian companies, will take part in the development of one of these zones," he said.
Along with PDVSA, the consortium will develop new blocks in Venezuela as well as projects that Russian companies were working on independently in the past, including Lukoil's Junin-3 Block, TNK-BP's Ayacucho-2 Block on the Orinoco delta, and Gazprom's Ayacucho-3 Block.
Russia's Rosneft signed an additional MOU of its own with PDVSA, while NOC partners signed a more specific MOU with PDVSA on the formation of a joint venture to operate at the Junin-6 Block.
Investment in the development of Junin-6 will total $30 billion over 25 years, according to Russian Deputy Prime Minister Igor Sechin. “These are only rough estimates calculated for 25 years,” he said.
“We are working very quickly and hope that the joint venture will be set up in the near future,” said Sechin, who added, "We expect the joint venture to start working before the end of the year.”
Meanwhile, Russia’s state-owned pipeline monopoly OAO Transneft signed an MOU on long-term cooperation with PDVSA on construction of the infrastructure needed for the Junin-6 project, including 1,300 km of pipeline and the refurbishment of a further 170 km of pipeline.
Russia’s state-owned industrial conglomerate Rostekhnologii and PDVSA also signed an agreement to cooperate in cleaning up oil sludge.
Contact Eric Watkins at [email protected].
Rendering from Cedar LNG.
US Government Accountability Office.
