CARACAS, Nov 28 (Reuters) - Russia’s state-controlled oil giant Rosneft (ROSN.MM) will pay $1.2 billion up front and also give a $1 billion loan to Venezuela’s state company PDVSA for access to the Carabobo 2 block, a minister said on Monday.
The companies are partnering in the project in the southern Orinoco extra heavy crude belt, which Venezuelan Energy Minister Rafael Ramirez said could eventually produce 400,000 barrels per day (bpd).
Rosneft is also one of five Russian companies in a consortium working with PDVSA to develop the Junin block 6 of the Orinoco belt.
Carabobo 2 had been one of the last major ventures to be awarded in the Orinoco, where the South American OPEC member is pinning hopes for future production increases.
“A $1 billion loan for PDVSA and a bonus of $1.2 billion were agreed,” Ramirez told reporters, saying a formal deal would be signed at a later date.
Two other Carabobo blocks were auctioned to foreign companies last year, creating joint ventures with state oil firm PDVSA and paving the way for billions of dollars of foreign finance in one of the world’s largest crude reserves.
The three Carabobo projects have similar surface areas containing some 128 billion barrels of oil, Venezuela says.
The government believes about 26 billion barrels are recoverable. The projects are each slated to produce 400,000 bpd. Each project will include the construction of a heavy crude upgrader that can turn 200,000 bpd of tar-like Orinoco oil into lighter and more valuable synthetic crude.
The remaining 200,000 bpd will be blended with lighter oil to yield an intermediate grade, officials say. (Reporting by Marianna Parraga; Editing by Gary Hill)