Rosneft Cautious of PDVSA Gas Deal on Local Sales: Official

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Rosneft OAO is hesitant to join the Mariscal Sucre natural gas project if future production will only go to the domestic market, said a company official from an industry event Wednesday.

The Moscow-based producer is still discussing its possible participation in the project off the coast of eastern Venezuela, said the official, who asked not to be named in line with company policy. Petroleos de Venezuela SA President Eulogio del Pino was scheduled to travel Wednesday to Russia to try to secure Rosneft’s investment in the project, according to company officials questioned about the absence of PDVSA’s president at Venezuela’s largest oil event.

PDVSA, as the state-owned producer is known, plans to ramp up natural gas production from offshore projects including Mariscal Sucre to phase out imports of the fuel from Colombia and supply power plants, many of which are running on expensive imported diesel.

Industry publication Upstream reported June 12 that PDVSA was set to sign the joint venture with Rosneft. PDVSA officials attending an oil conference in Maracaibo, Venezuela declined to comment about the negotiations between the company and Rosneft regarding a potential partnership in the Mariscal Sucre area.

The Rosneft official said the Russian company may lend PDVSA $5 billion subject to being granted a larger stake in the Petromonagas joint venture and more operational control. Other conditions include PDVSA using the funds for infrastructure as well as other developments in Venezuela’s Orinoco heavy oil belt and Rosneft having the ability to sell at least some of any offshore gas it produces abroad, the official said.