Eni to Loan PDVSA $2 Billion, Venezuela’s Ramirez Says

Eni SpA (ENI), Italy’s largest petroleum company, will lend Petroleos de Venezuela SA $2 billion to develop oil projects and a power plant in Venezuela, Minister Rafael Ramirez said.

PDVSA, as the company is known, will invest $1.5 billion of the loan in a joint venture it has with Eni in the Junin 5 oilfield of the Orinoco Belt in central Venezuela, Ramirez said at a press conference in Caracas today. The remaining $500,000 will be spent on building an electricity plant in Guiria, eastern Venezuela.

Ramirez, who serves as both Venezuelan oil minister and president of PDVSA, said he expected Junin 5 to begin producing 50,000 barrels of oil a day next year. Eni will invest $1 billion a year over the next seven years to produce 75,000 barrels a day by 2013, Chief Executive Officer Paolo Scaroni said at the press conference. The project is expected to produce 240,000 barrels a day by 2018, Scaroni said.

“We are concentrating all our efforts on the Orinoco,” Ramirez told reporters. “Our personnel are already on site.”

Ramirez and Scaroni didn’t give details about when the loan must be repaid. Eni, based in Rome, will work with PDVSA to build a refinery in the Jose complex in northeastern Venezuela to refine the oil extracted from the Orinoco Belt, Ramirez said.

PDVSA, based in Caracas, has a 60 percent stake in the Junin 5 project. Eni owns the rest.

Developing Perla Gas

Ramirez also said Eni will sign an agreement soon with PDVSA to develop an offshore natural-gas field in the Cardon IV block. Eni and PDVSA will provide a platform that should begin producing gas by 2012, Ramirez said.

Eni said in April that it will start gas production with partner Repsol YPF SA (REP) at the Perla field, Venezuela’s largest gas discovery, in the Cardon IV block by 2013.

Perla, located in shallow waters of the Gulf of Venezuela, holds an estimated 16 trillion cubic feet of gas reserves, Eni said on Feb. 24.

Eni and Repsol each own 50 percent of the block where the field is located. PDVSA has the option to take as much as 35 percent when commercial operations begin.

To contact the reporters on this story: Corina Rodriguez Pons in Caracas at crpons@bloomberg.net; Charlie Devereux in Caracas at cdevereux3@bloomberg.net.

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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