Russian Consortium Visits Venezuelan Oil Fields

Orinoco Heavy Oil Belt
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SAN DIEGO DE CABRUTICA (Dow Jones Newswires), Jul. 27, 2009

Russia's deputy premier and company officials from a Russian oil consortium visited Venezuela's eastern oil-producing region Monday, an area where it plans to drill for extra-heavy crude.

They were accompanied throughout the region by Venezuela Oil Minister Rafael Ramirez, who said he hopes to finalize a deal with the Russians by September.

"We wanted the Russians to see for themselves the (oil) belt, the type of production that takes place here," Ramirez said.

The Russian contingency included company officials from Lukoil, Gazprom, Rosneft and other firms.

Among their stops was at an oil block that used to be controlled by the U.S. firm ConocoPhillips but after a nationalization is now 100% owned and operated by Venezuela state firm Petroleos de Venezuela, PdVSA.

The Russians gauged environmental matters and looked at other technical aspects of the area, PdVSA officials said.

The Russians, under a joint venture with PdVSA, would drill for extra-heavy crude in the Junin 6 block, which Ramirez said could produce 400,000 barrels a day

The Junin 6 block is separate from an ongoing bidding round for four other blocks in the eastern Orinoco region that PdVSA has opened to foreign firms.

The deadline for companies to bid on the blocks was set for Tuesday, but Ramirez confirmed Tuesday that the deadline was pushed back. Chevron, some Russian companies and more than a dozen other firms have expressed interest in the bidding round, known as the Carabobo project. It is the first bidding open to foreign investors in years.

The Russian firms' activity in Venezuela's oil region Monday comes after the heads of Russia and Venezuela met last year and agreed to increase relationships to produce and sell oil and gas. At the same time, they also have forged tighter military relationships, which has been of concerns to some in Washington.

"We look forward to more agreements with Venezuela," Russian deputy premier Igor Sechin said Monday, standing side by side with Ramirez at a PdVSA oil field.

The Russians could be involved in up to 1.2 million barrels a day of production in Venezuela if they were to win the bidding in the Carabobo and meet drilling expectations at the Junin 6 block, Ramirez said.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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