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Russia, Venezuela set up joint venture to develop Orinoco Oil Belt

September 28, 2012, 5:01 UTC+3

The reserves of the Carabobo-2 block reach 6.5 billion tonnes of oil

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CARACAS, September 28 (Itar-Tass) —— The largest Russian oil company Rosneft and Corporation Venecolana del Petroleo (CVP), which is a subsidiary of the Venezuelan national oil and gas company PDVSA, signed an agreement to establish a joint venture to develop the Carabobo-2 block in the Orinoco Oil Belt. The Russian oil company has a stake of 40% in the joint venture.

The countries also signed a memorandum on mutual understanding, an agreement for Rosneft to pay a bonus of 1.1 billion dollars and an agreement for a loan of 1.5 billion dollars for five years to CVP.

The documents were signed by Rosneft President Igor Sechin and Venezuelan Minister of Oil and Mining and PDVSA CEO Rafael Ramirez in the presence of Venezuelan President Hugo Chavez.

The bonus will be paid in two instalments – 440 million dollars within ten days after the establishment of the joint venture and the rest of the sum after Rosneft takes a final decision on the project.

The loan will be allocated in annual tranches of no more than 300 million dollars with an interest rate of LIBOR plus 5.5%.

The agreement over the establishment of the joint venture includes the plan for its development, articles of incorporation and its charter. A decision of the National Assembly of Venezuela, a resolution of the republican Ministry of Oil and Mining and a relevant decree of the Venezuelan president are needed to launch the operation of the joint venture.

The reserves of the Carabobo-2 block reach 6.5 billion tonnes of oil.

Meanwhile, the countries signed an agreement over the establishment of a joint venture for oil services, construction services, as well as a memorandum over Russia’s Inter RAO to build a petroleum coke-powered electric power station with the design capacity of 300 MW.

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