PDVSA & ONGC Sign $1.4B Agreement to Boost Production

Source: www.gulfoilandgas.com 11/4/2016, Location: South America

The president of the Bolivarian Republic of Venezuela, Nicolas Maduro, signed financing agreements for 1.4 billion to increase production at the joint ventures Petrolera Indovenezolana and Petrodelta. He was accompanied by People's minister of Petroleum and president of Petroleos de Venezuela, S.A. (PDVSA), Eulogio Del Pino.

The financing agreement between PDVSA and the state oil company of ONGC Videsh Limited, will strengthen the joint venture Petrolera Indovenezolana, S.A.

"It is very important for Venezuela to strengthen our oil industry under the Siembra Petrolera Plan. In the last 16 months, our country has received 10.7 billion dollars in investments to expand oil production by 855,000 barrels thus strengthening the Hydrocarbons Economic Driver. We have endured very low prices, with a speculative system that hurts investments in the area. But few countries in the world have Venezuela’s ability to withstand these attacks”, said President Maduro.

"There is a strategic nature to the alliance with India which is becoming the epicenter of the entire market in its region. It is the country that is building the most refineries worldwide. It has the highest consumption growth this year, exceeding levels of consumption in China, with an increase of 7% year-on-year. Therefore, it is one of the most important nations for Venezuela from a strategic point of view”, said Minister Del Pino.

The minister said that with this financing PDVSA will be able to meet the increase in shipments to India of approximately 300 mbd. In the short term we will try to duplicate it.

Under PDVSA Strategic Socialist Plan (PES) 2016-2025 it was agreed with ONGC the implementation of projects that will increase the level of production of the joint venture to 40 mbd and produce a cumulative total of 138.9 million barrels of crude oil for the period 2017-2031, with an estimated 318 million dollars investment.

This agreement provides for a loan from ONGC Oil to Indovenezolana, S.A. of up to 318 million dollars for investments and operating expenses.

The production increase will allow the joint venture to generate the revenues needed to pay short and long term loans as well as the fulfillment of all obligations with Venezuela, particularly royalties, taxes and contributions required under current tax legislation. Additionally, it will generate profits for shareholders.

In April 2008, PDVSA and ONGC formed this company with equity participation of 60% and 40% respectively, for the production of crude oil in the San Cristobal field, located in the Jun?n area of the Hugo Ch?vez. Orinoco Oil Belt.

Minister Del Pino said that the amount of financing obtained by joint ventures to date totals 10.7 billion dollars distributed as follows: Petrolera Sinovensa $4,015 MM, Petrobosc?n $2,000 MM, Petrodelta $1,130 MM, Petrozamora $1,000 MM, Petroquiriquire $1,200 MM, Petrocabimas $625 MM, Petrowarao $420 MM, and Petrolera Indovenezolana $318 MM. This demonstrates the strength and financial and operational strength of Venezuela’s main industry.

Petrodelta will increase production by 40 mbd
Minister Del Pino signed the financing agreement between PDVSA and the company DP Delta Finance B.V., to boost production of the joint venture Petrodelta, S.A. The agreed amount is $ 1,130 MM, to increase production from 40 to 110 mbd in the next five years.

President Maduro highlighted the confidence of domestic investors through the participation of the company Delta DP Finance BV, headed by Oswaldo Cisneros Fajardo. The private productive sector thus joins in the task of promoting the Bolivarian Economic Agenda, and generate more foreign currency revenues for the country.

Petrodelta's equity participation is distributed as follows: Corporaci?n Venezolana del Petroleo, S.A., (56%), PDVSA, Social, S.A., (4%) and DP Delta Finance B.V. (40%). The latter company belongs to the domestic private productive sector and acquired the shares of HNR Finance.

The Bolivarian Government, through the Hydrocarbons Economic Driver, creates the necessary conditions to increase the capacity of the domestic industry, which will support the current and future production plans of PDVSA and generate foreign currency revenues for the country.


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