Russia’s Rosneft OJSC agreed to pay $500 million to Petroleos de Venezuela SA to increase its stake in their Petromonagas crude-processing joint venture.
The deal will increase Rosneft’s stake in the upgrader that converts heavy oil into synthetic crude to 40 percent, PDVSA, as the Venezuelan state-owned company is known, said in an e-mailed statement, confirming earlier comments by President Nicolas Maduro. Rosneft previously held 16.7 percent, and PDVSA owned the remainder.
“The $500 million in new investment for production in the Venezuelan oil industry comes amid a crisis,” Maduro said during a broadcast of a ceremony where Rosneft and PDVSA officials signed the deal on Friday in Caracas.
Venezuela, holder of the world’s largest oil reserves, is enduring its deepest recession in a decade after oil prices slumped amid a global supply glut. In a bid to counter shrinking government revenues, Maduro this week raised gasoline prices for the first time in almost two decades and devalued the nation’s currency to get more bolivars for its petrodollars.
The Petromonagas project located in Venezuela’s Orinoco belt produced an average of 133,600 barrels a day of the synthetic crude in April, according to the latest data available from PDVSA. The upgrader prepares the oil to be processed in traditional refineries.
Rosneft and PDVSA also signed an agreement for the development of the Mejillones and Patao offshore natural gas fields, part of the Mariscal Sucre project.
Venezuela has been asking its partners to increase investment in joint ventures for several years to raise cash. In 2013, then Oil Minister Rafael Ramirez sought to give companies operating in the Orinoco Belt more autonomy to make decisions related to investments and operations, inviting them to bring in their own rigs, goods and services and financing for the joint projects.