Today, as part of the working visit of Russian Federation President Dmitry Medvedev to Orenburg, Gazprom's Management Committee Chairman Alexey Miller took part in a meeting with Venezuelan President Hugo Chavez.

In the presence of Dmitry Medvedev and Hugo Chavez, Alexey Miller and Rafael Ramirez, Venezuelan Energy & Mines Minister, President of Petroleos de Venezuela SA (PDVSA) signed a Memorandum of Understanding.

The document contemplates potential large-scale interaction between the companies, particularly in field development, infrastructure construction, oil and gas extraction and processing, including joint low pressure gas production projects.

The area of mutual interests covers hydrocarbon transportation, geological exploration, reserve estimation and certification, LNG production, services including drilling operations, oil & gas well and equipment repair.

To implement the accords set forth in the Memorandum, the parties will establish the relevant working groups.

“Gazprom has been working successfully in Venezuela for several years already. The Memorandum signed today identifies the mechanisms of choosing new projects for joint implementation and will contribute to deepening the bilateral strategic cooperation in a wide spectrum of aspects not only in Venezuela but also in other countries of South America. In particular, I am referring to joint operations in Bolivia,” said Alexey Miller.

Background:

Being the second-largest in the Western Hemisphere after the USA, Venezuela’s proven natural gas reserves account for 4.1 tcm.  The annual volume of gas production in Venezuela is about 30 bcm. Venezuela’s proven oil reserves amount to 11.2 bln t (7 per cent of the global total), with Maracaibo, Falcon, Oriental, Apure and the Orinoco Belt being the largest fields. The USA is the major importer of Venezuelan oil.

In August 2005 Gazprom was proclaimed the winner of a tender for Phase A of the Rafael Urdaneta project and was awarded the natural gas exploration and development licenses for the Urumaco 1 and Urumaco 2 blocks in the Gulf of Venezuela. In accordance with the bidding rules for Urumaco 1 and Urumaco 2, Gazprom set up two joint-stock companies UrdanetaGazprom – 1, SA and UrdanetaGazprom – 2, SA. The potential natural gas reserves of Urumaco 1 and Urumaco 2 average 80 bcm. At the moment stage two of geological exploration is in progress.

In September 2008 Gazprom and PDVSA signed the Memorandum of Understanding on the Blanquilla Este y Tortuga project embracing natural gas exploration and production offshore Venezuela, its supply to the domestic market, as well as its liquefaction and export.