Russian oil company Rosneft signed a heads of agreement with the Venezuelan state-owned oil and gas company PDVSA to establish a joint venture for a large-scale project offshore Venezuela.
According to Rosneft, the project encompasses production, treatment and sale of natural gas at the offshore fields Patao, Mejillones and potentially Rio Caribe in Venezuela.
The signed greement is concluded in elaboration of the Memorandum on the joint projects development that was signed by the parties in June 2015 at the St-Petersburg International Economics Forum.
The new agreement provides that the parties will move to the practical stage and perform the in-depth feasibility study on the project. In parallel, the parties plan to obtain an approval by the Venezuelan Ministry of Petroleum and Mining and complete the set of legally binding agreements regulating establishment of the joint venture.
According to the heads of agreement, the parties will each have 50% equity share in the joint venture, while Rosneft will be the project operator.
The gas production at the three fields is expected to be up to 25 million cubic meters per day or 9 billion cubic meters per annum.
This is not the first joint venture the two companies are part of as they currently cooperate on five upstream projects in Venezuela.