LUKoil may transfer its Venezuelan assets to Russian consortium

September 21, 2009

LUKoil may transfer its Venezuelan assets to Russian consortium  

LUKoil is ready to hand over its assets in Venezuela to a Russian oil consortium provided the company receives compensation for its outlay, the head of Russia's largest independent oil producer said on Friday.

The National Oil Consortium (NNK) of Russian companies working in Venezuela, which was formed last October, includes Russian energy giant Gazprom, state-run crude producer Rosneft, Russian-British joint oil venture TNK-BP, oil company Surgutneftegaz and LUKoil.

"We [LUKoil], Gazprom and TNK-BP confirm that if a joint venture is set up [between NNK and Venezuela's PdVSA], we will be ready to transfer all our assets [in Venezuela] to the consortium," Vagit Alekperov said.

However, he said LUKoil would expect the consortium to reimburse its outlay on geological exploration in Venezuela. Last July, LUKoil and the State Petroleum Company of Venezuela signed an agreement on the joint study of the Junin-3 block in the Orinoco heavy oil belt in Venezuela's Guarico state.

The Russian company has estimated the block to have reserves of 600 million metric tons of oil. Venezuelan Energy and Petroleum Minister Rafael Ramirez said his country and Russia's NNK were planning to invest $20 billion in the development of the Junin-6 block.

He added that Russian companies had paid a $1 billion bonus to participate in the oil field that could produce 400,000-450,000 barrels daily NNK is expected to establish a joint venture with PdVSA by the end of 2009.

 In line with Venezuelan laws, foreign companies can produce oil as part of a joint venture. Venezuela is one of the largest oil producing countries in the world, with about 87 billion barrels of proven conventional oil reserves as of 2008. In addition, it has huge non-conventional oil deposits (heavy crude). Most of these deposits are located in the Orinoco oil belt.  -  Copyright 2009, RIA Novosti. All rights reserved.