Japan and Venezuela eye more bilateral cooperation in energy sector

Japan and Venezuela plan to launch a bilateral working group in the next few months to look at various opportunities including development of the oil-rich Orinoco belt, upstream gas sector and financing of energy projects in Venezuela, sources close to the matter told.
Japan's Minister of Economy, Trade and Industry Toshihiro Nikai and Venezuelan oil minister Rafael Ramirez, officially agreed to launch the bilateral working group at a meeting in Tokyo, sources said. METI's natural resource agency director-general, Toru Ishida, and Venezuela's Deputy Oil Minister Ivan Orellana will jointly chair the working group, sources added.

Ramirez's visit to Tokyo over May 29-31 was the third in three months and is seen as a bid to push forward previous agreements with Japanese companies and the government's energy financing arms. Ramirez met senior executives of various Japanese companies that want to expand their energy businesses in Venezuela.
Meanwhile, concerns are growing among Japanese companies and the government regarding the futures of their investments in the wake of Venezuela's attempts to nationalize the oil sector and now iron companies too, sources said. President Hugo Chavez announced May 21 that several iron companies would be nationalized, a big blow to Japanese trading houses that also run steel and metals businesses, sources added.

There has been a slew of agreements between Japanese and Venezuelan companies as well as governments in the energy sector. Japan and Venezuela signed an MoU on energy cooperation March 19. On April 6, Ramirez, who also heads state-owned oil company PdVSA, signed a memorandum of understanding with Japan Oil, Gas and Metals National Corporation on oil and gas development.
PdVSA also agreed to conduct a two-year joint study on onshore development in the Orinoco belt with it as well as upstream player Inpex and trading house Mitsubishi. It also signed a memorandum of understanding with Japanese trading houses Mitsubishi, Mitsui, Itochu and Marubeni on the development of gas fields offshore Proyecto Mariscal Sucre region.

This followed PdVSA, US major Chevron, Mitsubishi, Mitsui and some other oil companies signing an agreement in March to develop the Delta Caribe LNG project.
State-owned Japan Bank for International Cooperation also signed an MoU to lend Venezuela's state-owned oil company PdVSA $ 1.5 bn to expand its 140,000 bpd El Palito and 200,000 bpd Puerto La Cruz refineries.