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Moscow and Caracas sign £9bn deal to tap oilfields

by James Tweedie

VENEZUELA and Russia announced a £9 billion investment deal for the South American nation’s vital oil and gas industry early yesterday.

The investment is aimed at doubling Venezuelan crude oil production to 6 million barrels a day by 2019, compared with Russia’s current 10 million and Saudi Arabia’s 9.7 million.

The agreement between state oil firm PDVSA and the majority government-owned Russian company Rosneft was reached on Wednesday following talks in Caracas between Venezuelan President Nicolas Maduro, PDVSA president Eulogio Del Pino and Rosneft president Igor Sechin.

Mr Maduro said that the investment would be made in the Orinoco Belt, which runs through north-eastern Venezuela and out into the Caribbean sea.

With more than 250 oil fields, it contains some of the largest oil reserves in the world, in addition to 19 gas fields.

The largest deposits of heavy crude oil are located in the west of the zone in Junin and Carabobo. Together with offshore deposits they add up to the world’s largest oil reserve.

PDVSA and Rosneft will also explore the possibility of expanding Venezuela’s natural gas production.

Rosneft proposed increasing its stake in Venezuelan gas company Petromonagas from 17 per cent to 40 per cent, the upper limit on overseas investment in a national firm.

Mr Maduro announced plans for more joint exploration projects and technology-sharing between the Russia and Venezuela during a visit to Moscow in January.

“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,” he said. “This will expand investments in stocks and oil production.”

PDVSA and Rosneft have been collaborating in the Orinoco belt since 2012, when the Russian firm agreed to invest £10.5bn in the area.

Russian Foreign Minister Sergei Lavrov was also in the country to meet his Venezuelan counterpart Delcy Rodriguez.Mr Lavrov’s visit, his fourth this year, was to review and strengthen bilateral agreements previously signed by the presidents of both countries.He stressed his support for Mr Maduro’s government and said that Venezuela’s internal problems should be resolved constitutionally.

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