Within the visit of Igor Sechin, Deputy Chairman of the Russian Federation Government to Venezuela, a Gazprom delegation, led by Alexander Medvedev, Deputy Chairman of the Company Management Committee took part in the activities aimed at developing the bilateral cooperation in the gas sector.

The delegation joined the meeting of the Russian-Venezuelan high-level commission, at which an agreement in principle was reached for the signing of an intergovernmental agreement. The agreement will serve as a legal framework for implementing large-scale joint investment projects in the oil and gas sectors in Venezuela and third countries.

The delegation visited the Scorpion Vigilant platform at Urumaco I Block in the Gulf of Venezuela, where drilling of the first exploratory well in the Block was launched in the presence of Hugo Chavez, President of Venezuela and Igor Sechin, Deputy Chairman of the Russian Federation Government.

As part of the visit a number of meetings was held with leaders of Venezuela’s Energy and Petroleum Ministry, as well as with representatives of the Venezuelan state-run oil and gas company Petroleos de Venezuela SA. The parties highly appreciated the achieved cooperation results and resumed negotiations concerning participation in new promising projects. In particular, a question was raised with regard to Gazprom’s participation within a consortium of Russian oil and gas companies in the project for heavy oil production in the Carabobo area of Venezuela’s Orinoco Belt area.

Background:

Being the second-largest in the Western Hemisphere after the USA, Venezuela’s proven natural gas reserves account for 4.1 tcm, with some 30 bcmpa of gas (mainly associated petroleum gas) produced domestically. The country’s proven crude oil reserves amount to 11.2 bln t (7 per cent of the global total), with Maracaibo, Falcon, Oriental and Apure being the largest oil fields. The USA is a major importer of Venezuelan oil.

The exclusive right to produce natural gas is being held by the Venezuelan state-run oil and gas company Petroleos de Venezuela SA (PdVSA).

In August 2005 Gazprom was proclaimed the winner of a tender for Phase A of the Rafael Urdaneta project and was awarded with natural gas exploration and development licenses for the Urumaco I and Urumaco II Blocks in the Gulf of Venezuela. In accordance with the bidding rules for Urumaco I and Urumaco II, Gazprom set up two joint-stock companies UrdanetaGazprom I, SA and UrdanetaGazprom II, SA. The potential natural gas reserves of Urumaco I and Urumaco II average 100 bcm.