PDVSA teams up with India’s ONGC

Venezuela’s PDVSA and India’s ONGC have signed a deal to explore and produce both oil and natural gas in eastern Venezuela.

State-owned PDVSA will hold a 60% interest in the joint venture with the remaining stake in ONGC’s hands, said Venezuelan Oil Minister Rafael Ramirez.

Ramirez said ONGC will pump $450 million into the project, known as Petrolera Indo Venezolana.

As an initial sign-on bonus, ONGC has paid PDVSA $173 million, while the rest of the investment will come in the next five years.

Venezuela estimates that the venture will pump around 232 million barrels of crude over the next 25 years from the San Cristobal oilfield, which covers some 160 square kilometers, in the eastern states of Anzoategui and Guarico. Production is set to begin within three years.

Ramirez said the agreement is “a first step” toward further energy cooperation between the two countries, saying that Venezuela plans to ship 150,000 barrels of heavy crude a day to India, reported The Times of India.

“This agreement falls into the framework of our diversification policy,” Ramirez said.

Venezuelan President Hugo Chavez has long expressed a desire to reduce dependence on the US, which remains the number one buyer of oil, despite troubled relations between the countries.