A delegation of OAO Gazprom led by Deputy Chairman of the Board of Directors Alexander Medvedevrecently visited Venezuela.

During the visit, Mr. Medvedev met with Venezuela’s Energy and Oil Minister and the President of Petroleos de Venezuela S.A. (PDVSA) Rafael Ramirez. The two men discussed the results of current Gazprom projects in the oil and gas sphere and agreed to study the possibilities for participation in promising new projects.

After a period of negotiations, the two companies, with Venezuelan President Hugo Chavez present, signed a Memorandum of understanding on a project called Blanquilla Oeste y Tortuga, including exploration and production of natural gas on the shelf, its supply on the domestic market, as well as liquefaction and export of gas. The document foresees a join study project data in order to determine the level of interest in future participation in exploration and development of hydrocarbon fields in the region.

Alexander Medvedev also met with Venezuela’s Foreign Affairs Minister Nicolas Maduro. The two men discussed matters relating to current cooperation and agreed to maintain their strategic partnership in Venezuela and third countries.

Background:

Venezuela’s proven natural gas reserves total 4.1 trln cubic meters, putting it in second place after the USA in the western hemisphere. About 30 bn cubic meters of gas (mainly associated gas) is produced every year in Venezuela. The country has 11.2 bn metric tons of proven oil reserves (7% of world reserves). The country’s largest fields are Maracaibo, Falcon, Oriental and Apure. The USA is the largest importer of Venezuelan oil.

The state oil and gas company Petroleos de Venezuela S.A. (PDVSA) has a monopoly right to produce natural gas in Venezuela.

In August 2005, OAO Gazprom was declared the winner of a tender on Phase A of the Rafael Urdanetaproject and received the respective licenses to explore and develop natural gas on the Urumaco-1 and Urumaco-2 fields in the Gulf of Venezuela. Pursuant to the terms of the tender, Gazprom established two joint-stock companies on the Urumaco-1 and Urumaco-2 fields – UrdanetaGazprom-1, S.A. and UrdanetaGazprom-2, S.A. The forecast natural gas reserves in the Urumaco-1 and Urumaco-2 fields are about 100 bn cubic meters.