Rosneft, PDVSA to do study for Venezuelan offshore project, agree on reciprocal oil supplies
MOSCOW. July 29 (Interfax) - Rosneft and Petroleos de Venezuela, S.A. (PDVSA) have signed a number of documents aimed at further developing strategic cooperation between the two companies, the Russian oil major said.
The companies have signed an agreement to conduct a feasibility study for the project to develop the Potao, Mejillones and Rio Caribe offshore blocks in Venezuela, Rosneft said.
The document was signed in continuation of previously reached understandings on the creation of a joint venture to operate at the Potao, Mejillones and Rio Caribe fields. The feasibility study will make it possible to determine the optimal model for exploration and production of gas, and to consider possible options for monetizing hydrocarbons, the company said.
The results of the study, which is expected to be completed in the first half of 2017, will be submitted to Venezuela's Petroleum Ministry for determination of potential tax breaks and conditions for the commercialization of the project's resources. The companies expect that gas production will total about 9 billion cubic meters per year, Rosneft said.
In addition, Rosneft and PDVSA signed the key conditions of contracts for reciprocal supplies of crude oil and oil products. They will later sign the necessary legally binding documents regarding supplies of oil and oil products by Rosneft in exchange for Venezuelan oil and oil products produced by PDVSA. The companies expect shipments to begin in 2016.
Rosneft and PDVSA, with the involvement of LLC Inter RAO Export, also discussed possible options for cooperation in the development of Venezuela's electricity sector. They are considering building power generating facilities that would run on petroleum coke, gas and coal, as well as using hydropower potential.
The companies also signed an agreement on development of cooperation in the organization of training for Venezuelan citizens at Russian post secondary institutions that are partners of Rosneft.
Rosneft and PDVSA are implementing five upstream projects in Venezuela. Projects at the production stage are Petromonagas, Petroperija and Boqueron, in which Rosneft holds stakes of 40%, 40% and 26.67%, respectively. The Petromiranda project, in which Rosneft holds 32%, is at the stage of pilot development, and the Petrovictoria project, in which Rosneft holds 40%, is at the exploration stage. The initial oil in place of these projects exceeds 20.5 billion tonnes.