Russia's Rosneft has sealed a deal with the Venezuelan government for the development of two of its offshore gas fields for a period of 30 years. The Russian state major will have the rights to sell all gas it extracts from the fields-Patao and Mejillones-for a period of 30 years, including in the form of LNG.
The two fields, according to a Rosneft press release, hold a combined 180 billion cu m of natural gas. The target annual production rate the company's local subsidiary, Grupo Rosneft, is looking at is 6.5 billion cubic meters of gas over a period of 15 years.
Rosneft already has a stable presence in Venezuela's oil industry. It is partnering with PDVSA on five production projects, which have combined estimated reserves of 20.5 billion tons of crude, or 105.265 billion barrels. Under one of these projects, Petrovictoria, the companies earlier this year began test production in the Orinoco Belt-the place where most of Venezuela's untapped crude oil reserves lie.
Rosneft reports that initial production from Petrovictoria averaged 472,000 bpd, which should increase to 800,000 bpd in the future. Last year, Rosneft's total share of oil production from the joint projects in Venezuela reached 2.67 million tons, or 19.57 million barrels. Related: Yuan-Priced Crude Futures Could Arrive Before Christmas
The Russian company is one of the notable partners of Venezuela and its troubled state oil company. So much so that it sparked worry among U.S. legislators when PDVSA granted it the rights to a majority stake in its U.S. business, Citgo, as collateral for a loan Rosneft extended to the Venezuelan company last year.
The total loans Rosneft has extended to the Venezuelan company stand at US$6 billion, according to August calculations by Rosneft. Caracas also has debts to Moscow, which the latter agreed to restructure when it became clear last month it's either that for Caracas or a default.
Venezuela's total debt to international creditors is around US$140 billion.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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