Petróleos de Venezuela, the South American country's main oil producer, is aiming to double Venezuelan oil production by the end of 2019.
Rosneft has agreed to make a $14 billion investment in Venezuela's oil and gas sector, said Venzuelan President Nicolas Maduro on Wednesday.
Maduro met with Rosneft CEO Igor Sechin earlier on Wednesday, in the company of Eulogio del Pino, President of Petróleos de Venezuela (PDVSA), and Diosdado Cabello, the leader of Venezuela's National Assembly, Reuters reported.
"We had a great meeting and agreed on investment of over $14 billion," Mr. Maduro said on Venezuelan television, adding that the funds would be used to help double the country's oil output.
Petróleos de Venezuela has previously stated it has ambitions to double oil production by 2019 to six million barrels a day. Four million barrels a day are expected to come from the oil-rich Orinoco Belt, but few "industry experts" believe those goals are achieveable, Reuters said. During the broadcast, Mr. Maduro declined to give a breakdown of the investment plan.
Nevertheless, Rosneft's new investment is certainly welcome news for cash-strapped Venezuela, which is looking to boost oil production to turnaround an economy that's suffered due to the recent tumble in oil prices.
Russia has suffered its own economic woes as a result of last year's sharp drop in oil prices. It's also been forced to cope with economic sanctions imposed on it by Western nations as a result of its stance on the Crimea and the Ukraine crisis, which led to the ruble currency taking a tumble at the end of last year.
The latest investment comes after Rosneft agreed a deal with Petróleos de Venezuela for supplies of oil and oil products last November. That agreement will see 1.6 million tonnes of oil and 9 million tonnes of oil products supplied to Rosneft over the next five years. According to Petróleos de Venezuela, the two companies are likely to further strengthen ties after having agreed to "create companies together" to boost oil production. The company said it was looking to expand crude extraction in the Orinoco Belt, where it already has joint ventures with Rosneft.
Petróleos de Venezuela also revealed Rosneft has proposed increasing its 16.7 percent stake in the existing Petromonagas joint venture to 40 percent, the maximum allowed for foreign partners according to Venezuelan law.
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