The Russian Federation has agreed to provide Venezuela with a two year $4 billion loan for armaments purchases in return for increased access to developing Venezuela’s heavy crude and offshore natural gas fields.
The energy agreements were signed between Russian oil firm Rosneft, state-owned natural gas company Gazprom and Venezuela’s state oil company Petroleos de Venezuela SA during a ceremony in the Venezuelan capital Caracas attended by Venezuelan President Hugo Chavez and Russian Federation Deputy Prime Minister Igor Sechin. Chavez subsequently stated on state television, "Russia and Venezuela, each country with its own dimension, are walking today on our own feet. We're working on large-dimension projects from oil, gas and petrochemicals to finance, banking and trade," Rossiiskaia Gazeta newspaper reported.
According to Sechin, Russian energy companies are interested in expanding their efforts to develop the Orinoco Belt Junin-6 deposit, where the Russian-Venezuelan joint venture began working last December. According to plan, the joint venture’s first drilling and subsequent oil is expected in May 2012, with initial production to consist of roughly 50,000 barrels per day.
The Chavez administration beyond bilateral energy ties is interested in reequipping its military with Russian armaments in the wake of a U.S. arms embargo.
By. Charles Kennedy, Deputy Editor OilPrice.com
