Orinoco Heavy Oil Belt
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TOKYO (Dow Jones Newswires), Apr. 7, 2009

Venezuelan President Hugo Chavez said Tuesday the country's possible energy and petrochemical projects with Japanese companies may lead to $33.5 billion in investment.

Japan wants to diversify its energy sources and Venezuela wants to diversify its markets, therefore, "Japan is an ideal market for Venezuela," Chavez said.

He was in Tokyo on the last day of his three-day visit to Japan. Chavez met with Japan's prime minister Taro Aso Monday and agreed to set up a joint task force to explore opportunities for the two countries to cooperate, mainly in energy.

The government-backed Japan Oil, Gas and Metals National Corp., or Jogmec, and five Japanese companies signed Monday agreements with Venezuela's state oil company Petroleos de Venezuela SA, or PdVSA, on joint energy study projects.

The agreements were about feasibility studies to develop Orinoco tar and an offshore natural gas block.

Jogmec, Inpex Corp. (1605.TO) and Mitsubishi Corp. (8058.TO) signed an agreement on the Orinoco tar study, while Mitsubishi, Mitsui & Co. (8031.TO), Itochu Corp. (8001.TO) and Marubeni Corp. (8002.TO) separately signed agreements on the natural gas study.

Orinoco tar is a heavy hydrocarbon similar to oil sands that is seen in abundance in Venezuela's Orinoco basin. The Japanese entities said details such as scheduling and costs had not been decided.

The four Japanese trading companies that signed agreements on the gas block will study data to be released by Venezuela and probably suggest a development plan for liquefied natural gas as a consortium about a month later, said a senior official from one of these companies.

Separately, a consortium led by the Japan Bank for International Cooperation is considering loan facilities of up to US$1.5 billion for the revamp of two Venezuelan refineries including the Puerto La Cruz refinery, the senior official said.

Chavez said Tuesday, without giving details, that there is also cooperation in projects involving liquid natural gas production facilities and petrochemicals.

The Venezuelan president was to leave Japan Tuesday for China.  

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