March 31, 2010, 8:59PM ET
By FABIOLA SANCHEZ
CARACAS, Venezuela
Venezuela and Russia announced a joint venture Wednesday to drill for heavy crude oil in eastern Venezuela, saying they expect to start producing 50,000 barrels a day this year.
A new joint company will be run by state-owned Petroleos de Venezuela SA, or PDVSA, and five Russian companies, and will pump heavy crude in the Orinoco River basin, Oil Minister Rafael Ramirez said.
He told reporters the new mixed company will also build an upgrader facility to process about 450,000 barrels a day -- a plan that would give a significant boost to Venezuela's oil output when completed.
The agreement was announced as officials in Caracas prepared for a visit by Russian Prime Minister Vladimir Putin, his first to the South American country.
Venezuela's government said PDVSA officials signed a contract to form the company with a consortium of the Russian companies Rosneft, Lukoil, TNK-BP, Gazprom and Surgutneftegas. PDVSA owns 60 percent of the venture.
Ramirez said the project aims to be producing 50,000 barrels of crude a day by the end of the year. It's estimated that developing the oil project in the Junin 6 block of the Orinoco region could require $30 billion in investment.
President Hugo Chavez has forged close ties with Russia in recent years and has bought more than $4 billion in weapons from Russia, including assault rifles, helicopters, planes and missiles.
Ahead of Putin's visit, Venezuelan and Russian officials plan to finalize details on a series of agreements in energy, transportation, health, agriculture and more, Vice President Elias Jaua said at a meeting of officials from both countries.
Jaua said Russia also sent a water plane that will be used this week to douse wildfires that have raged through the forests of Venezuela's El Avila national park in the mountains that rise above Caracas. The blazes have blanketed the city with a smoky haze in recent days.
Source: http://www.businessweek.com/ap/financialnews/D9EPUVV80.htm
By FABIOLA SANCHEZ
CARACAS, Venezuela
Venezuela and Russia announced a joint venture Wednesday to drill for heavy crude oil in eastern Venezuela, saying they expect to start producing 50,000 barrels a day this year.
A new joint company will be run by state-owned Petroleos de Venezuela SA, or PDVSA, and five Russian companies, and will pump heavy crude in the Orinoco River basin, Oil Minister Rafael Ramirez said.
He told reporters the new mixed company will also build an upgrader facility to process about 450,000 barrels a day -- a plan that would give a significant boost to Venezuela's oil output when completed.
The agreement was announced as officials in Caracas prepared for a visit by Russian Prime Minister Vladimir Putin, his first to the South American country.
Venezuela's government said PDVSA officials signed a contract to form the company with a consortium of the Russian companies Rosneft, Lukoil, TNK-BP, Gazprom and Surgutneftegas. PDVSA owns 60 percent of the venture.
Ramirez said the project aims to be producing 50,000 barrels of crude a day by the end of the year. It's estimated that developing the oil project in the Junin 6 block of the Orinoco region could require $30 billion in investment.
President Hugo Chavez has forged close ties with Russia in recent years and has bought more than $4 billion in weapons from Russia, including assault rifles, helicopters, planes and missiles.
Ahead of Putin's visit, Venezuelan and Russian officials plan to finalize details on a series of agreements in energy, transportation, health, agriculture and more, Vice President Elias Jaua said at a meeting of officials from both countries.
Jaua said Russia also sent a water plane that will be used this week to douse wildfires that have raged through the forests of Venezuela's El Avila national park in the mountains that rise above Caracas. The blazes have blanketed the city with a smoky haze in recent days.
Source: http://www.businessweek.com/ap/financialnews/D9EPUVV80.htm
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