Five Russian oil majors form Venezuelan consortium

Nov 10, 2008 01:00 AM

Russia's largest oil and gas producers -- Rosneft, Gazprom, LUKoil, TNK-BP and Surgutneftegaz -- have joined forces in Venezuela, taking 20 % stakes each in a consortium that will develop oil projects in the South American country, Rosneft President Sergei Bogdanchikov said.
The consortium was registered on October 8 and is to have a rotating operatorship, Bogdanchikov was quoted as saying.

Venezuela's PdVSA will at a later stage join the Russian companies to form a Venezuelan-Russian consortium.
Russia's deputy Prime Minister, Igor Sechin, has said that the creation of a consortium, an idea suggested by the oil companies, would help minimize risks and reduce costs that are especially high for operations in Venezuela's Orinoco extra heavy oil belt.

Closer Russian-Venezuelan ties
Rosneft's Bogdanchikov was part of a high-level Russian delegation led by Sechin that visited Venezuela and Cuba to negotiate a number of deals, including in energy. As political and economic ties between Russia and Venezuela have become closer over the last year, Russian oil and gas companies are becoming more actively involved in Venezuela's hydrocarbon projects.
During Venezuelan president Hugo Chavez's visit to Moscow in July, TNK-BP, LUKoil and Gazprom signed a number of agreements with PdVSA to appraise and develop projects in Venezuela.

Bogdanchikov said that during his recent visit to the South American country, his company asked the Venezuelan government for a license to develop the Delta Centro block in Orinoco, the Rosneft chief was quoted as saying.
"We have sent them a letter with a proposal to give us the development of the Orinoco delta," Bogdanchikov said, adding that crude at the block was "lighter than on other blocks, and we would not need the construction of upgraders, unlike on other fields." Bogdanchikov estimated the resources at the block at up to 300 mm tons.

Gazprom, meanwhile, has started drilling the first deep-water exploration well on Urumaco 1 project in western Venezuela. Commercial gas production at the field is expected to start in four to five years, Sechin was saying.
The Russian delegation also visited Cuba, where Sechin met with Cuban leader Raul Castro. A number of agreements were signed, including in the oil and gas sector.

Russian oil pipeline monopoly Transneft is considering pipeline projects in Cuba, Transneft chief Nikolai Tokarev said.
"They have a lot of old pipelines, which need to be reconstructed. There is also need to build new ones," the agency quoted Tokarev as saying. "We are now looking at concrete projects," he said.
Cuba produces about 5 mm tpy (100,000 bpd) of crude, Tokarev said.

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