Viet Nam National Oil and Gas Group (PetroVietnam) signed a deal to explore for oil in Venezuela’s Orinoco oil belt on Tuesday with Venezuela Petroleum Corporation in Caracas.

Viet Nam will invest US$3.2 billion in the oil exploration project making it Viet Nam’s biggest foreign investment project so far.

The contract signing ceremony in the Venezuela capital was attended by Deputy Prime Minister Hoang Trung Hai, chairman of PetroVietnam Dinh La Thang, PetroVietnam’s general director Phung Dinh Thuc, Ambassador Extraordinary and Plenipotentiary of the Socialist Republic of Viet Nam in Venezuela Tran Thanh Huan.

After four years’ negotiation the contract cemented the cooperation programme on oil exploration between the two countries’ governments, with an oil exploration joint venture dubbed PetroMacareo set up between PetroVietnam Exploration and Production Corporation (PVEP) and the Venezuela Petroleum Corporation (CVP).

The joint venture has total capital of US$8 billion. CVP, a branch of Venezuela’s state oil company PDVSA, will contribute 60 per cent of the capital, while PVEP provides 40 per cent.

PetroMacareo will manage the Junin project in the Orinoco oil belt, which has reserves of 33 billion barrels, with production predicted of 200,000 barrels per day.

The joint venture is expected to produce crude oil after three years, with an output capacity of 10 million tonnes of crude annually after five years.

The duration of the contract is 25 years, with an option for a 15 year extension. — VNS