MEXICO, April 4 (RIA Novosti) - The Venezuelan parliament has ratified a deal to set up a joint oil extraction venture of state-run Russian and Venezuelan oil companies, local media reported on Thursday, Moscow time.
The joint venture of Russia’s Rosneft and Corporacion Venecolana del Petroleo (CVP), a subsidiary of state-owned Petroleos de Venezuela S.A. (PDVSA), will extract oil and associated gas at the Carabobo-2 (“Northern”) and Carabobo-4 (“Western”) blocks of the Andean nation’s oil-rich Orinoco belt. Rosneft will hold a 40-percent stake in the joint venture.
Under the deal, signed in September 2012, the new joint venture will operate on the area of 340 square kilometers (131 square miles) in the states of Anzoategui and Monagas, for an initial term of 25 years.
Rosneft CEO Igor Sechin earlier said Rosneft will invest $16 billion in the project to develop the Carabobo-2 bloc. Commercial oil production at the bloc is expected to hit 400,000 barrels per day.
According to Venezuelan Petroleum and Mining Minister Rafael Ramirez, joint Russian-Venezuelan oil extraction is to reach 1 million barrels a day by 2021. So far, Russian companies are involved in five extraction projects in the country.
In a separate development, PDVSA and Russian heavy machine production facility Uralmash signed on Wednesday a memorandum of understanding to jointly produce drilling rigs.