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PDVSA and ENI agreed to operate joint venture Junin Block 5

Caracas.- Petróleos de Venezuela SA (PDVSA), through its subsidiary Venezuelan Oil Corporation(CVP), signed a Memorandum of Understanding with the Italian oil company ENI for the formation of a joint venture aimed at the implementation of the primary activities of exploration and production of extra heavy oil in the Junin Block 5 of the Orinoco Oil Belt (FPO), plus signing a framework agreement for the establishment of a refining joint venture, which must target processing extra-heavy crude extracted from this block.

Joint ventures for production and refining will be constituted with PDVSA, as the major shareholder with a shareholding of 60% and 40% to ENI.

During the signing, the President of the Bolivarian Republic of Venezuela, Hugo Chávez, welcomed the participation of the company ENI in the Orinoco Oil Belt, the largest oil reserve in the world.

"The fact that Venezuelans have freed the Orinoco Oil Belt of the interests that were settled by the old PDVSA, is what allows us today to sign this agreement, right now there are working in different areas energy oil companies from 21 countries, 27 companies , 2 regional companies, 2 international consortiums, the world is in Belt" said Chavez.
On his part, the Minister of Popular Power for Energy and Petroleum president of Petroleos de Venezuela SA (PDVSA), Rafael Ramirez, said: "This project is part of our Oil Sowing Plan to continue developing our Orinoco Oil Belt specifically the Junin Block 5 with an estimated investment of 8 thousand 300 million dollars to produce 240 thousand barrels per day of upgraded crude of 16 ° API.”

The framework agreement for the refining joint venture contemplates the design and construction of a refinery that will process a total volume of 350 thousand barrels per day, of which 240 thousand will be diluted to 16 ° API, and another 110 thousand barrels per day of upgraded crude and intermediate flows for obtaining products.

In this sense, the agreement states that the refinery will be located within the Petroleum and Petrochemical Industrial Complex, General Jose Antonio Anzoategui (Jose) and its function should be designed to maximize the flow of fuel, primarily diesel with specifications Euro 5, the production of naphtha and liquefied petroleum gas in addition to recovering and returning to the joint venture, production volume and quality of the diluents used to facilitate the transportation of extra heavy crude.

The parties also agree a work schedule in which the basic engineering for the construction of the refinery will begin this year, the engineering, procurement and construction of the project in 2014 and the start of operations is planned by 2018.

Development of Combined Cycle Thermoelectric Plant for CIGMA
As part of the development of projects in the electric power area, PDVSA and ENI signed a Memorandum of Understanding for future development of a Combined Cycle Thermoelectric Plant of about 1 thousand MW of capacity at the Industrial Complex Gran Mariscal de Ayacucho (CIGMA) located in the city of Guiria, Sucre state.

Under this Memorandum of Understanding, ENI will assume the construction and financing of this plant, for which it already has the necessary basic engineering, estimating the start of construction on the second semester of 2010.

The power generation plant will be fueled with natural gas production from the joint venture from both parties, after obtaining the appropriate permit from the Ministry of Popular Power for Energy and Petroleum to exploit the areas in the Gulf of Paria and Punta Pescador.

Technological Cooperation in the gas sector
Considering that ENI has developed technologies for the production and processing of oil and gas, with the potential to be applied to the exploitation of the resource base of Venezuela, a Memorandum of Understanding was sign for cooperation in technology, which also includes human resources training and exchange of experts, among others.

In the same matter, the chief executive of ENI, Paolo Scaroni said that for the Italian oil company the union with PDVSA allows a drive to achieve new binational objectives.

"During these two years we have made a gas discovery in the Perla Well at Cardon 4, the largest in the region that will generate an extraordinary development opportunity for Venezuela, and today we have signed the landmark agreement of Junin 5 to pursue energy projects promoted by PDVSA and Eni, "Scaroni said.