RIA Novosti reported that Russia’s largest state oil company Rosneft and Corporation Venezolana del Petroleo a subsidiary of Venezuela’s state oil and gas company PDVSA have signed an agreement to establish JV to develop the Carabobo 2 bloc in the southern Orinoco extra heavy crude belt in Venezuela.

The Russian company’s share will be 40%. The two companies also signed a memorandum of understanding, an agreement on Rosneft paying a bonus of USD 1.1 billion and a deal to issue USD 1.5 billion loan to CVP for 5 years.

The documents were signed by Mr Igor Sechin CEO of Rosneft and Mr Rafael Ramirez Venezuelan Oil Minister, PDVSA chief in the presence of President Mr Hugo Chavez.

The bonus will be paid in two installments: USD 440 million within ten days after the establishment of the JV and the rest after Rosneft makes the final decision on the project. The loan will be provided in tranches of not more than USD 300 million annually at the annual interest rate of LIBOR+5.5%. The bloc’s reserves total 6.5 billion tonnes of crude.

Mr Sechin said that Rosneft will invest $16 billion in the project to develop the Carabobo 2 bloc. Commercial oil production at the bloc is expected to hit 400,000 barrels per day. Rosneft is also one of several Russian oil companies that have formed a consortium to develop the Junin bloc 6 of the Orinoco belt in Venezuela.

Source - RIA Novosti

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