Venezuela Signs $40 Billion in Oil Deals with India, Japan, Spain, U.S.

Venezuelan President Hugo Chavez has signed contracts with oil companies from India, Japan, Spain and the U.S. in order to establish two joint venture companies on Wednesday. The companies in turn will invest 40 billion dollars in the country.

By Kiraz Janicke – Venezuelanalysis.com
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Caracas, May 12, 2010 (venezuelanalysis.com) –Venezuelan President Hugo Chavez has signed contracts with oil companies from India, Japan, Spain and the U.S. in order to establish two joint venture companies on Wednesday. The companies in turn will invest 40 billion dollars in the country.

The signing ceremony for the establishment of the joint venture companies PertoIndependencia and Petrocarabobo , which will exploit the oil fields in the eastern Orinoco region, was held in the headquarters of state oil company Petroleos de Venezuela (PDVSA) in Caracas, with the presence of Ministers for Energy and Petroleum Rafael Ramirez, and for Economics and Finance, Jorge Giordani, Vice President of Exploration and Production of PDVSA, Eulogio del Pino, and director of the Venezuela Petroleum Corporation (CVP), Pedro León.

Del Pino estimated that the newly created joint ventures will produce a combined 800,000 barrels per day in 2016.

Petrocarabobo is comprised of CVP (60%), Repsol (11%), Petrocarabobo Ganga (11%), PC Venezuela (11%) and Indoil (7%) and will operate in Carabobo 1 block.

CVP has a 60% stake in Petroindependencia, Chevron has 34%, Japan Carabobo has 5% and Suelopetrol (1%). PetroIndependencia will operate in Carabobo 3 block. 

Each joint venture is expected to begin producing 50 000 barrels per day by the end of 2010 and 400 thousand per day by 2016, with two refineries to be built to improve the quality of Venezuela’s heavy crude and an oil pipeline to be built in Araya.

The companies won the contracts to drill alongside PDVSA in the Orinoco in February.

The Energy and Petroleum Ministry is evaluating whether to open up Carabobo block 2 for “strategic partnerships.”

Last week Venezuela also signed a deal with China's development bank for a $20 billion loan and CNPC (China National Petroleum Corporation) also won a minority stake in a $16bn project to develop heavy crude in Junin 4 block, in the Orinoco oil belt.

The Junin 4 block project is also expected to produce 400 thousand barrels a day by 2016.