Venezuela Signs Oil Deals with Vietnam, Belarus and Angola

Caracas, July 13th 2010 (Venezuelanalysis.com) – Venezuela has increased its number of oil joint ventures with developing countries after signing agreements with Vietnam, Belarus and Angola.

On June 30, Venezuelan state-owned oil company PDVSA joined with its Vietnamese counterpart Petro-Vietnam Exploration and Production (PVEP) to form the joint venture Petromacareo in order to exploit reserves in Venezuela’s Orinoco Belt.

A PDVSA statement said that the company would be “destined to the execution of primary production activities and the refinement of extra-heavy crude in the Junin 2 block of the Orinoco Belt.”

PDVSA will have a 60% share in the company, which is expected to be producing 50,000 barrels per day (BPD) by 2012, reaching 200,000 BPD by 2016.

Petromacareo also has plans to build a refinery in the state of Anzoátegui.

Half of the 200,000 BPD expected to be produced in 2016 will be sent to a refinery in Vietnam, which is also to be built by the joint venture.

The Vietnamese government paid Venezuela $584 million in order to take part in the joint venture.

The Orinoco Belt has the largest known oil reserves in the world.

Venezuela also signed a memorandum of understanding last week with Angola state oil company Sonangol and Cuban firm Cupet to exploit two oil fields in the Venezuelan state of Anzoátegui.

The operation is projected to yield 20,000 BPD over five years.

Finally, PDVSA signed a joint venture with the state-owned Belarus oil company last week.

Belarus is expected to import 320,000 barrels of Venezuelan oil in 2010 and more than twice that amount in 2011.

Until now, Belarus has depended almost entirely on Russia for its fuel imports, but the two had a dispute over oil agreements earlier this year.

Belarus and Venezuela have also signed a joint agreement La Roana to create an agricultural company in the Venezuelan state of Guárico.

The company will be made up of a battery farm, a dairy and milk processing, dry grain storage, greenhouse cultivation, fodder production, agricultural vehicle maintenance, and other necessary infrastructure and will cost $342 million.

Under Venezuelan law, PDVSA must have a controlling share of 60% of any joint venture to ensure sovereignty over the resource and that the majority of the profits remain in the hands of the Venezuelan people.

The country has signed deals with companies from Spain, India, Japan, the US and others already this year.

PDVSA President Rafael Ramirez announced last month that between 2001 and 2009, the company had spent $56 billion on social programmes such as health and education.