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NK Rosneft' OAO and Venezuelan Corporacion Venezolana del Petroleo Sign Joint Venture Agreement


Thursday, 23 May 2013 08:00pm EDT 

NK Rosneft' OAO (Rosneft) announced that on May 23, an agreement to create a joint venture (JV) to develop heavy oil reserves in Venezuela in the framework of the Carabobo-2 project was signed with the Venezuelan Corporacion Venezolana del Petroleo (CVP), a subsidiary of PDVSA. Rosneft's stake in JV will amount to 40%, the other 60% will be held by CVP. The Carabobo-2 project includes blocks Carabobo-2 North and Carabobo-4 West with a total area of 342 square kilometers located in the Orinoko river's heavy crude belt. Reserves at the blocks are estimated at 40 billion barrels (6.5 billion tons). Commercial oil production is expected to peak at over 400,000 barrels per day (about 25 million tons per year). Rosneft is to pay a bonus of $1.1 billion for entering the project in two tranches (40% and 60%) and also to offer a loan of $1.5 billion to CVP with the maximum yearly take-off of $0.3 billion. JV plans to perform the entire cycle of site exploration and development, building ground facilities and field pipelines. There are also plans for building a special refinery (upgrader) to increase the quality of the extracted oil to commercial. Rosneft’ President said before that new JV would be named Petrovictoria. The companies have also signed a confidentiality agreement allowing Rosneft to obtain geological data on Venezuelan offshore blocks for possible future cooperation, as well as a memorandum of intent to study several gas sites on Venezuelan shelf.