It has been reported that a $14bn (£9bn) oil and gas investment deal has been signed by the nations of Russia and Venezuela. The news was revealed by Venezuelan president Nicolas Maduro, who stated that the funding would help to develop oil production in Venezuela over the coming years.
The agreement is between Rosneft, the Russian oil giant, and Petroleos de Venezuela (PDVSA), the Venezuelan state oil firm. In a television appearance President Maduro said: “We had a great meeting and agreed on investment of over $14bn.”
The money is expected to go towards boosting crude oil production in the nation’s Hugo Chavez Frias field. One section, the Orinoco Belt, runs through the north-east of Venezuela and into the Caribbean Sea and it is estimated that some of the world’s largest crude reserves can be found here. It is not only oil that is on the agenda, however, as the two companies also want to increase the gas sphere of the Latin American country.
The deal comes as PDVSA attempts to double the nation’s oil production by 2019. This means the country would need to produce six million barrels every day, resulting in eight million tons of oil per year. In 2014 this figure was just 1.6 million tons, which shows the immense and ambitious challenge the country has set. It is predicted that around four million barrels will come directly from the Orinoco Belt.
Aside from the hefty targets, it was revealed that Rosneft has offered to increase its stake in PDVSA subsidiary Petromonagas. The Russian firm already holds 16.7% but could soon own the maximum share allowed for a foreign partner of 40%. It has also previously been mentioned that the two countries might join forces for some future exploration projects, with President Maduro saying earlier this year: “We have agreed to step up the investment and participation of Russian companies and their share of joint ventures in the Orinoco oil belt and other projects. This will expand investments in stocks and oil production.”
There are more than 19 gas and 250 oil fields in the Orinoco oil and gas basin, with some of the world’s largest oil deposits found in Carabobo and Junin. A deal has already been signed by PDVSA and Rosneft to develop the southern belt’s Carabobo 2 area, with $16bn (£10.5bn) invested in the project in 2012. With the latest announcement, it seems that even more collaboration is to occur.
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