Reliance Industries Ltd and Venezuelan state oil company Petroleos de Venezuela, SA have signed a 15-year heavy crude oil supply deal. The Indian petrochemical major also inked a memorandum of understanding (MoU) with Petroleos to further develop Venezuelan heavy oil fields.
RIL is estimated to invest around $8 billion to develop the oil fields. The company refused to comment on the investment. RIL is also looking to invest close to $20 billion from 2012-13 till 2015-16 on sectors including petrochemicals and refining.
The Venezuelan company is to supply between 300,000 and 400,000 barrels a day of Venezuelan heavy crude oil to Reliance’s two refineries in Jamnagar, under the crude oil supply contract.
As per the MoU, RIL is to explore upstream options for joint participation in heavy oil projects of the Orinoco Oil Belt. RIL will also co-operate with Petroleos by providing technical assistance in the areas of offshore upstream, refining and other downstream projects.
In a statement, Rafael Ramirez, the People’s Minister for Petroleum and Mining and President of Petroleos, said the first official document signed with the Indian company was an MoU that would allow Reliance to participate in crude oil exploration and production activities in the Ayacucho and Boyaca four blocks in the FPO.
“This agreement ensures the sale of our oil to countries that have a sustainable growth,'' Ramirez stressed. He added that Venezuela is currently sending 270,000 bpd to the Asian country, while India’s oil consumption currently amounts to 4.2 million barrels of crude oil per day.