Venezuelan and Russian oil companies plan to start producing
50,000 barrels of heavy crude a day this year from the Junin block
in the eastern Orinoco region, Venezuelan Energy Minister Rafael
Ramirez said Wednesday.
The consortium plans to invest $30 billion to extract and
process extra-heavy crude from the block that would eventually
produce 450,000 barrels a day, Ramirez said in a statement.
The 448 square-kilometer Junin 6 block is estimated to comprise
some 53 billion barrels of reserves. Petroleos de Venezuela SA had
previously estimated the project's required investment at $18
billion.
The Venezuela-led project will see PDVSA in control of 60% of
the joint venture, with a consortium of Russian firms holding the
remaining 40%. The members of the consortium are Rosneft (ROSN.RS),
OAO Gazprom (GAZP.RS, OGZPY), Lukoil Holdings (LKOH.RS, LUKOY),
Surgutneftegas (SNGS.RS), and TNK-BP Holding (TNBP.RS), according
to previous reports from PDVSA.
The deal is the second after Venezuela signed a similar deal
with Italy's ENI SpA (ENI.MI, E) to develop the neighboring Junin 5
block.
The Junin 5 project would need about $18 billion of investment,
and production would peak at around 240,000 barrels a day by
2016.
-By Inti Landauro, Dow Jones Newswires; 57-1-694 00 76;
colombia@dowjones.com