9 Sep 2009 17:04

Sechin hopes PDVSA, National Oil Consortium will set up joint venture soon

MOSCOW. Sept 9 (Interfax) - Petroleos de Venezuela S.A. (PDVSA) and Russia's National Oil Consortium will set up a joint venture in the near future, Deputy Prime Minister Igor Sechin told journalists on Wednesday.

"We are working very quickly and hope that the joint venture will be set up in the near future. There are procedures that we must get through," he said.

Sechin said the Venezuelan parliament must approve the creation of the joint venture. The finishing touches are currently being put on the documents and they will then be submitted to parliament, he said. "We expect the joint venture to start working before the end of the year," he said.

The joint venture could produce about 450,000 barrels of oil per day, Venezuelan Oil and Energy Minister Rafael Ramirez said.

"We agreed on the creation of the Russian National Oil Consortium, which will take part in the development of blocks. Oil reserves at the blocks will reach 52 billion barrels, while production will total 450,000 barrels per day," Ramirez said.

"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.

Joint work in the oil and gas sphere is one of the strategic goals in cooperation between Russia and Venezuela, he said.

Sechin noted that the companies were talking about oil production at the Junin-6 block. The terms of this block's development will be specified during President Hugo Chavez's visit to Russia, he said. Investment in the development of Junin-6 is to total $30 billion over 25 years, he said. "These are only rough estimates calculated for 25 years," Sechin said.

This investment will not only be spent directly on the development of Junin-6 but also on the creation of infrastructure in a remote part of the Orinoco delta in addition to social programs to develop this region.

National Oil Consortium, which was set up in fall 2008, includes Rosneft , Surgutneftegas , Lukoil , Gazprom Neft and TNK-BP . Each company has a 20% stake in the consortium.

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. This will enable the Russian-Venezuelan joint venture to become the largest oil producer in Venezuela.