Venezuela, Russia likely to sign energy deal Wednesday

By RIA Novosti,

Caracas : Venezuela’s state-owned oil company, Petroleos de Venezuela (PDVSA), will sign a “strategic” cooperation agreement with Russian oil and gas companies to create a join energy consortium, the Venezuelan energy minister said Monday.

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The bilateral cooperation agreement is expected to be signed during a two-day visit to Venezuela by Russian President Dmitry Medvedev Wednesday, said Rafael Ramirez, who also heads state-owned PDVSA.

Gazprom will head the Russian half of the consortium, which will include state-run oil giant Rosneft, British-Russian joint oil venture TNK-BP, Siberian oil and gas producer Surgutneftegas and the country’s largest independent crude producer LUKoil, the Russian energy giant’s international relations department head, Stanislav Tsygankov, said.

Earlier Russian Energy Minister Sergei Shmatko said that once the Russian consortium has been established, a joint Russian-Venezuelan oil and gas conglomerate led by PDVSA is expected to be set up with the Venezuelan oil company owning a controlling stake.

The joint consortium, which is due to be established by next spring, could become an oil and gas leader in Latin America, Shmatko said.

He also said investment in the project is expected to top “tens of billions of dollars”.

Venezuela is one of the world’s largest oil producing states, with about 87 billion barrels of proven conventional oil reserves. In addition, it has huge non-conventional oil deposits (heavy oil). Most of these deposits are located in the Orinoco oil belt