RUSSIA & VENEZUELA COOPERATION
Among Latin American investment opportunities, Rosneft's has focused on Venezuela whose President Hugo Chavez (who died in March 2013) took the initiative in the late 1990s to have a strategic alliance with Russia. In 2000, on then President Putin's orders, Rosneft and other Russian companies looked more seriously into opportunities to invest in Venezuela's petroleum sector.
The first major opportunity was the Junin 6 block of ultra-heavy crude oil in the Orinoco Tar Belt. Rosneft thus leads the block's National Oil Consortium (NOC). The other NOC partners are LUKoil and GazpromNeft - (Rosneft in 2013 acquired TNK-BP's share in this). This is a multi-billion dollar integrated project which is to include an expensive upgrader to turn the bituminous oil into synthetic crude. Rosneft leads another grouping for Orinoco's Carabobo-II block, a $25bn venture which is to develop the bitumen into 480,000 b/d ultra-heavy crude requiring an upgrader to turn these into at least 200,000 b/d of synthetic crudes.
Both projects are JVs with the state-owned Petroleos de Venezuela (PDVSA). Rosneft has paid $1.2bn to PDVSA and giving it another $1bn as a loan in return for access to the Carabobo-II project. The payments are part of a $4bn loan Russia had offered to Venezuela for defence-related purchases from Moscow. The Carabobo-II block was won by Rosneft at the beginning of 2010 at an auction in which several IOCs participated.
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