BELARUS NEWS AND ANALYSIS

DATE:

08/09/2006

Belarus to develop Venezuela block with PDVSA

CARACAS, Venezuela, Sept 8 (Reuters) - Venezuela and Belarus have signed a preliminary accord to create a joint venture that will certify oil reserves in the Junin I block of the Orinoco extra-heavy crude belt, the Venezuelan government said on Friday.

Venezuelan President Hugo Chavez, a harsh critic of the United States, has sought investment from foreign oil companies such as China's CNPC and Russia's Lukoil in efforts to certify an estimated 235 billion barrels of the tar-like heavy crude.

The presidential press office said in a statement that Venezuela state oil company PDVSA and and Belarus' state energy company Belarusneft "agreed to advance a structured plan for the certification of energy reserves in the Junin I block ... a cooperation agreement for the creation of a joint venture was signed.

Chavez late on Thursday said "in the Junin I block soon we will be drilling with a joint venture (between) Belarus and Venezuela. The oil is there (in the Orinoco Belt), the world's biggest reserve."

Companies participating in the certification process are not guaranteed development rights once the certification is finished, but energy authorities say participating companies are more likely to be selected as future partners.

Four joint ventures between Venezuelan state oil company PDVSA and foreign majors such as Exxon Mobil and Chevron currently produce around 620,000 barrels per day of extra heavy crude that is upgraded to synthetic oil.

Chavez, who is seeking to reduce Venezuela's historic reliance on U.S. energy markets, has shunned traditional oil majors in favor of state oil companies from allied nations such as Iran and Russia. CNPC and Lukoil are both working with PDVSA to certify Orinoco blocks.

Energy authorities say the certification of the Orinoco reserves will give Venezuela, the world's No. 5 oil exporter, the largest reserves in the world.

Chavez, who recently visited Belarus as part of a world tour to sign energy agreements with nations including Russia and Vietnam, has promised to increase oil sales to China from around 150,000 barrels per day to 500,000 barrels per day in the coming years.

Washington has expressed concern about the security of Venezuela's oil sales to United States, which depends on the South American nation for around 12 percent of its oil supplies.

Chavez has repeatedly accused the Bush administration of plotting an Iraq-style invasion, and has threaten to cut off oil exports if the U.S. moves against him.

Source:

http://asia.news.yahoo.com/060908/3/2pmio.html