The National Oil Consortium (NOC) group of Russian energy giants plans to invest about $24 billion in the development of Junin-6 Block project in the oil-rich Orinoco River belt in Venezuela, Yuri Lyovin, head of the project for Gazprom Neft, said on Thursday.
The NOC includes Gazprom Neft, Rosneft, TNK-BP, Surgutneftegas and LUKoil. NOC plans to develop Junin-6 Block as part of a joint venture with Venezuelan state-controlled oil company PDVSA, or Petroleos de Venezuela, Sociedad Anonima, whose stake in the joint venture totals 60%.
"We do not unveil information on the next year's budget. I can just say it will amount to several tens of million dollars. Both parties will back the project in proportion to their stake, which means that PDVSA will back 60% of the project, while NOC will cover the remaining 40%. The issue of loan financing has not been raised yet, as NOC's own funds are enough for the implementation of the project's first stage. The loans will be needed when we move to the second stage, when we need tens of million dollars. The project's overall costs reach about $24 billion," Lyovin said in an interview to Nefte Compass Energy Intelligence.
Lyovin said that Junin-6 would secure production of an additional 40,000 barrels per day for Gazprom Neft, or 4% of current output.
"Besides, the sales margin is much better there. We'll also get an opportunity to book huge reserves. But what is most important is that we'll acquire priceless experience of entering a new market, holding negotiations with governments and partners and training qualified employees," he said.
Geological reserves of Junin-6 block are 52.6 billion barrels of oil, while recoverable reserves amount to 10.96 billion barrels. The block area totals 447.85 square kilometers. The NOC has already drilled 14 wells on the block.
The project's operations are expected to be launched as early as in 2010. Venezuelan President Hugo Chavez said that the Russian-Venezuelan joint venture planned to produce 50,000 bpd in 2014 and expected to raise the daily output to 450,000 bpd by 2017.
MOSCOW, December 16 (RIA Novosti)
