Venezuela's lagging oil industry may have received a much-needed boost from Repsol after accepting a US$1.2 billion credit line for a Petroquiriquire joint venture between Venezuelan state-run Petróleos de Venezuela SA (PDVSA) and Spanish Repsol.
Reuters reported that according to Repsol, annual production in the joint venture, which is 60 percent controlled by PDVSA and 40 percent by Repsol, currently averages approximately 41,600 barrels per day (bpd).
Repsol further noted that the money will be used for investments at Petroquiriquire during the next five years, including exploration, reactivating wells, and production facilities.
"Today we've achieved, after very long conversations, a financing deal that will allow us to double production," claimed PDVSA President Eulogio Del Pino regarding the three fields in the states of Zulia, Trujillo, and Monagas.
During a signing ceremony at the Miraflores presidential palace in the Venezuelan capital of Caracas, President Nicolás Maduro said the agreement "ratifies the mutual confidence between PDVSA and Repsol."
The Venezuelan leader also expressed his thanks to Repsol executives for reaching the pact following negotiations that commenced three years ago.
Maduro claimed that despite differences with the Spanish government, he is confident that his administration will have good relations with acting Prime Minister Mariano Rajoy should he be allowed to return to his position.
Maduro also announced that PDVSA reached a US$20 billion deal with Rosneft over potentially exporting Venezuelan natural gas to Russia.
The drop in the price of oil since 2014 and overreliance on revenue from the commodity has led to rising debts for PDVSA. As a result, the company is seeking new investments from foreign firms, though that has not been an easy task.
PDVSA bonds fell this week after a proposal to extend the maturities on US$5.3 billion of the firm's debt did not create sufficient interest from investors.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More