JOSE, Venezuela May 23 Venezuela's Petrovictoria, a joint venture between state oil company PDVSA and Russia's Rosneft, will start production in 2016 and reach 120,000 barrels per day, PDVSA said on Thursday.
The joint venture will produce ultra-heavy crude from the vast Orinoco Belt, a large deposit of oil in the Orinoco River basin of southeastern Venezuela.
Oil Minister Rafael Ramirez and Rosneft President Igor Sechin signed documents for the official creation of Petrovictoria, which must be approved by Congress.
Rosneft will grant PDVSA a $1.5 billion loan to develop the project, with an interest rate of Libor plus 5.5 percentage points. The project requires building oil production facilities as well as a heavy crude upgrader that can turn the tar-like Orinoco crude and into more valuable light oil.
Rosneft will soon make an initial payment the first $400 million of a $1.1 billion bonus that it agreed to as a condition for joining Petrovictoria project, Ramirez said.
The two were in the eastern Venezuelan town of Jose visiting the installations of Petromonagas, another heavy-crude upgrading project, in which Rosneft is also a partner.
They also signed an agreement to expand the Petromonagas upgrader's capacity to as much as 180,000 barrels per day (bpd) from the current 140,000 bpd through joint investment of $3.6 billion.
The two companies in 2013 plan to invest a combined $1.8 billion in projects in Venezuela.
Their total investment in projects in the OPEC nation will reach $28.4 billion by 2019.
Ramirez also said Rosneft will develop the Robalo offshore natural gas field adjacent the giant Perla gas discovery.