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2 Feb, 2010 12:35

Junin 6 oilfield to become a Russian–Venezuelan joint venture

On Monday, Russia and Venezuela signed a multimillion deal to develop the huge Junin 6 oil field in the South American nation's Orinoco River region – a territory twice as rich as other reserves, such as Saudi Arabia’s.

The agreement was signed by Pedro Leon, director at Venezuelan state oil company PDVSA (Petroleos de Venezuela SA), and Valery Rusakov, director at Russia's National Oil Consortium – comprised of Rosneft, energy monopoly Gazprom, Lukoil, TNK-BP and Surgutneftegaz – at a meeting between Russian Prime Minister Vladimir Putin and Venezuela's Energy and Oil Minister Rafael Ramirez in Moscow.

The two countries agreed to establish a joint venture to develop the oilfield, with Venezuela taking a 60% stake in the deal and Russia the remaining 40%.

According to the Minister of Energy Sergey Shmatko, a total of $20 billion will be invested into the development of the oil field, which has a reported 450 thousand barrels per day output capacity.

Igor Sechin, who oversees the fuel and energy sector in the cabinet, said the joint Russian-Venezuelan project would be implemented within 40 years, adding that development work would start later this year.

And talking at the meeting, Prime Minister Vladimir Putin stressed that Russia was ready to act as soon as all formalities are settled.

“Immediately after the Venezuelan parliament ratifies the agreement, the consortium of Russian oil companies will be ready to transfer a $600 million bonus,” he declared, adding, “This is the start of a big joint project. I am sure the work will go ahead according to plan and surely yield benefits for both countries.”