Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on May 28, 2015

Bookmark and Share

Venezuela and Russia agree on $14 billion oil investment

Venezuela and Russia agree on $14 billion oil investment thumbnail

Venezuela and Russia’s top oil producer, Rosneft, have agreed on around $14 billion in investment in the South American OPEC country’s oil and gas sector, President Nicolas Maduro said.

Maduro met the chief executive of state-owned Rosneft, Igor Sechin, on Wednesday, in the company of the president of state oil company PDVSA [PDVSA.UL], Eulogio del Pino, and National Assembly boss and Socialist Party No. 2 Diosdado Cabello.

“We had a great meeting and agreed on investment of over $14 billion,” Maduro said on Wednesday evening in a televised broadcast, adding the funds would go toward doubling Venezuela’s oil production.

PDVSA has formal ambitious targets to double national production to 6 million barrels a day by 2019, with 4 million of that projected to come from the Orinoco Belt, but few industry experts or foreign investors expect those goals to be met.

Speaking at a Socialist Party event broadcast on state television, Maduro did not provide a breakdown of the investment plan, and it remained unclear who would fund it.

PDVSA and the Venezuelan Oil Ministry did not immediately respond to requests for details.

Rosneft said in emailed comments that the $14 billion dollars was the total amount of investments of the company in Venezuela during the lifespan of current and future projects.

It already invested $1.8 billion in 2010-2014, and it sees its own oil production in the country rising to 8 million tonnes per year (160,000 barrels per day) by 2019 from 1.6 million tonnes in 2014.

The company also added that if shale oil production in the United States and Canada declined, Venezuelan oil could step in to meet demand in those markets.

Fresh investment would be a boon for cash-strapped Venezuela, which is seeking to ramp up oil output to counter an economic crisis and the recent tumble in oil prices.

Russia was also tipped into crisis by last year’s sharp drop in oil prices, which was compounded by Western sanctions over the annexation of Crimea and what the West says it support for rebels in eastern Ukraine, causing sharp falls in the value of the rouble currency.

Russia denies direct military involvement in eastern Ukraine.

Rosneft and PDVSA signed a new contract for supplies of oil and oil products of Venezuelan production, the Russian company said in November. The document envisages supplies of over 1.6 million tonnes of oil and 9 million tonnes of oil products to Rosneft within five years.

PDVSA said on Twitter the two countries on Wednesday had agreed to “create companies together” to boost crude production, adding both nations want to expand crude extraction in the Orinoco Belt, where Rosneft already has joint ventures with PDVSA.

The Venezuelan company said in a statement later on Wednesday Rosneft had proposed increasing its stake in the Petromonagas joint venture from the current 16.7 percent to reach 40 percent, the maximum allowed for a foreign partner in oil joint ventures in the South American country.



16 Comments on "Venezuela and Russia agree on $14 billion oil investment"

  1. Perk Earl on Thu, 28th May 2015 7:22 pm 

    Seems like a race between what oil sources are affordable to extract and process vs. the threshold that tips the climate into chaos.

    Pay now with a much lower standard of living or pay later with an out of control weather system? Humankind makes the call>>>>

  2. BobInget on Thu, 28th May 2015 9:20 pm 

    There’s no longer anything exotic about oil sands.
    Suncor’s early efforts were marred by exploding
    (retorts) but it’s been years since any major fires. You can bet Venezuela’s winters are more welcome then Russia’s or Alberta’s ..

    As I’ve been pounding the table for over a year, China, now Russia will be taking every barrel——-away from US imports.

    No US or Canadian company stepped up to help Venezuela, China and Russia did. Effectively ending any oil import relationship.

  3. BobInget on Thu, 28th May 2015 9:31 pm 

    Peak Earl,
    The climate is already in chaos.
    You and I know why.

    If our attention wasn’t drawn towards ‘securing’ Mid East oil we would find resources to mitigate effects of climate changes. As it stands (almost) nothing is being done. In fact if all the oil burned fighting useless wars were directed at survival,
    we might have had a shot.

  4. Perk Earl on Thu, 28th May 2015 9:32 pm

    Exxon finally won a settlement in an international court for 1.6 billion against Venezuela for being shown the exit door after investing billions to develop their oil.

    Hopefully the situation will work better for Russia.

  5. Makati1 on Thu, 28th May 2015 9:39 pm 

    BobInget, you are correct, but it also gives Russia and China a better position in Venezuela which the US has been walking away from. Oil, then docking for visiting war ships then …?

  6. Makati1 on Thu, 28th May 2015 9:49 pm 

    Perk, as you know, getting awarded an amount is not the same as receiving an amount. In today’s world nothing is for sure except death. The victims of the Exxon Valdez are still waiting for their money awarded ~25 years ago.

    As for Russia, perhaps they have better connection there? We shall see. Politics and money are too intertwined today to be predictable.

  7. GregT on Thu, 28th May 2015 11:54 pm 

    There is another variable to the equation. The one that pre-dates modern industrial society, and fossil fuels. Usery.

    “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

  8. Wetexasfanclub on Fri, 29th May 2015 4:02 am 

    This is certainly part of a geopolitical game going on, the ALBA countries joining the BRICS countries against NATO and OECD countries.

    One interesting observation about Venezuela, apart that they managed to ride their actual political and economical storm with the help of China and Russia is, that their production since about 2007 is basically flat. That means they managed to control their conventional decline with their enormous unconventional resources.

    From now on we should expect a slowly upwards creeping production from Venezuela. They might not meet their ambitious goals but they probably can – something even more important in peak times – guarantee steady production for decades to come.

  9. rockman on Fri, 29th May 2015 8:03 am 

    FYI – I don’t have the details in front of me at the moment but a year ago I read that THE big stumbling block for Vz to increase exports was the lack of upgraders needed to make their crud more marketable/transportable. An effort to overcome that problem recently was importing light Libyan (?) oil to blend with their crud.

    Imagine this scenario: Russia helping out Vz improve its upgrader system but in the meantime buying up a lot of light Eagle Ford production, making that short sail across the GOM, blending with the Vz crud and then selling to US refineries at a nice margin.

    Again a point some don’t realize: there is not a lot of oil produced in the western hemisphere that can be directly cracked in US refineries. Those plants are designed to process crude in a very narrow range: 29 API to 31 API. Always have and always will. Mixing Vz crud with lighter oil significantly increases the value blend above the combined value of the light + crud.

  10. Apneaman on Fri, 29th May 2015 1:36 pm 

    Superpower in Distress (or Delusionary Thinking in Washington)

    “Take a look around the world and it’s hard not to conclude that the United States is a superpower in decline. Whether in Europe, Asia, or the Middle East, aspiring powers are flexing their muscles, ignoring Washington’s dictates, or actively combating them. Russia refuses to curtail its support for armed separatists in Ukraine; China refuses to abandon its base-building endeavors in the South China Sea; Saudi Arabia refuses to endorse the U.S.-brokered nuclear deal with Iran; the Islamic State movement (ISIS) refuses to capitulate in the face of U.S. airpower. What is a declining superpower supposed to do in the face of such defiance?”

  11. Baptised on Fri, 29th May 2015 5:43 pm 

    Apneaman, “What is a declining superpower suppose to do in the face of such defiance?” It is simple beat the shit out of their on poor and down trodden.

  12. Makati1 on Fri, 29th May 2015 6:05 pm 

    Apneaman, that is a good article. Read it yesterday. The Empire of Chaos has only two options:

    1. Accept that they are dying back to being one of several powers, or…

    2, Push the red button…

    I hope it is the first, but I fear that it will be the second. There appears to be contagious insanity loose in the Beltway these days and it is getting worse, not better.

  13. ffkling on Fri, 29th May 2015 6:24 pm 


    Your gloating over the decline and downfall of your country of birth and the system that has afforded you a luxurious lifestyle speaks to deep rooted psychological issues based on a self-hating death wish turned outward. You have never offered a positive comment nor a solution.

  14. GregT on Fri, 29th May 2015 6:44 pm 


    The author of the article:

    Michael T. Klare is the Five College Professor of Peace and World Security Studies at Hampshire College in Amherst, Massachusetts.

    Have you ever stopped to think that the subject matter isn’t positive, and that there isn’t a comfortable solution?

  15. Davy on Fri, 29th May 2015 7:06 pm 

    FF, the Ape Man is Canadian but once live in the US and had a US wife.

  16. Apneaman on Fri, 29th May 2015 7:19 pm 

    Michael T. Klare is an American and I’m not. It is quite a stretch to claim that posting an article from an expert who is doing a piece on his life long area of expertise is gloating isn’t it? You’re sounding desperate and unstable freddy. WTF does offering a solution have to do with anything? Solutions are for problems freddy and humanity is facing predicaments; we blew our chance for solutions decades ago. All that time at NBL and you did not learn that? Guy will be sadden to hear it. Speaking of Guy, how many feel good positive solutions did he offer you? What Guy says is “only love remains” and “live a life of excellence”. I’m not exactly sure what he means by that, but I do not think he means for people to go around posting their email and challenging other commenters to boxing matches because you don’t like their comments. Who is the one with the deep rooted psychological issues? Who is the one who thinks space aliens are slaughtering cows? Who is the Holocaust denier? Me? I’m just an asshole, your the fucking nut job.

Leave a Reply

Your email address will not be published. Required fields are marked *