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Rosneft to acquire participatory share at 5 Venezuelan offshore areas

July 02, 2013, 19:37 UTC+3

The Agreement provides for among other things joint studies for evaluation of technical and economic viability of offshore gas and condensate production

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MOSCOW, July 2 (Itar-Tass) - Russia’s state-owned oil company Rosneft will acquire participatory shares at five Venezuelan offshore areas under the agreement signed with PDVSA on Tuesday, July 2.

Rosneft’s President and Chairman of the Management Board Igor Sechin and Venezuelan Oil Minister and PDVSA President Rafael Ramirez in the presence of the President of the Russian Federation Vladimir Putin signed a cooperation agreement for implementation of offshore projects in Venezuela.

The Agreement provides for among other things joint studies for evaluation of technical and economic viability of offshore gas and condensate production in Venezuela, gas liquefaction for export and domestic sales and evaluation of the prospects of joint ventures for development of gas and gas condensate fields.

To carry out joint studies the parties will set up a managing committee and working teams and PDVSA will provide information required for studies to Rosneft.

Companies will evaluate possibility of implementation of joint projects on Rio Caribe and Mejillones fields (Stage II of Mariscal Sucre Project) and exploration in the Venezuelan part of the Caribbean Basin and in the Gulf of Venezuela as well as near the Atlantic Coast of Venezuela.

Rosneft and PDVSA signed the agreement on cooperation to implement offshore projects. The document was signed in the presence of President Vladimir Putin and Venezuelan President Nicolas Maduro after their talks.

Utilising gas potential is one of Rosneft’s key priorities. The company is seeking to strengthen its positions in the world gas market and become an international oil and gas company.

Rosneft’s gas reserves are estimated at 5.8 trillion cubic metres. It is planning to extract about 100 billion cubic metres of gas a year by 2020.

Rosneft and several other Russian companies are already involved in a major hydrocarbon project at Venezuela’s Junin-6 block in the Orinoco River basin.

The giant Junin-6 oil field, which has geological reserves of over 50 billion barrels of oil, will be developed on a parity basis by a consortium of five major Russian oil companies: Gazprom Neft, LUKOIL, Rosneft, Surgutneftegaz and TNK-BP through OOO National Oil Consortium (NOC).

During the “early production” stage the production at the block will reach 50 thousand barrels of oil per day. It is planned that the block will supply up to 10 thousand barrels of crude per day by road to an oil treatment facility at the neighbouring Petrosidenia field, with the introduction of a pipeline after production increases. The construction of PetroMiranda’s own upgrader is expected to be completed in 5 years.

The geological reserves at the Junin-6 block are 52.6 billion barrels of oil, with 10.96 billion barrels recoverable. The block covers an area of 447.85 square kilometres. Total development costs for Junin-6 are estimated at nearly 25 billion U.S. dollars. At the peak of production, the field is expected to produce up to 450 thousand barrels per day (about 22.5 million tonnes of oil per year).

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