RIL closing in on massive oil block in Venezuela

Years after dropping out of an ONGC-led consortium for developing a giant oilfield in Venezuela, Reliance Industries is close to taking an oil block in the Latin American nation that can produce as much as 10 million tonnes of oil per annum.

RIL has signed an agreement with Venezuelan state oil company Petroleos de Venezuela, SA (PdVSA) to jointly "evaluate the development plan for Ayacucho 8 block" in the oil-rich Orinoco belt of Venezuela, the Indian company said in a statement.

RIL and PdVSA also extended the term of an MoU they signed last year by one year for continued cooperation.

"The signing of the Joint Study Agreement for Ayacucho Block 8 and the extension of MOU marks further strengthening of the long-standing relationship between RIL and PdVSA as well as between India and Venezuela," the statement said.

RIL currently imports about 300,000 barrels per day of oil from Venezuela for processing at its twin refineries at Jamnagar in Gujarat. It now wants to increase these volumes, possibly to 400,000 bpd.

The company signed a Memorandum of Understanding with PdVSA last year to develop a project in the Orinoco extra heavy crude belt.

Venezuela had offered 2-3 oil blocks, of which Ayacucho 8 has been selected for the joint study. The block can produce 200,000 barrels per day of oil (10 million tonnes a year).
Besides developing the field, the project may also involve setting up an upgrader to convert the synthetic oil into oil that can be processed in refineries.

Last year, RIL had signed a new agreement to buy 150,000 bpd of oil, which was gradually raised to 270,000 bpd.

Under the new 15-year agreement, the South American country would sell between 300,000 and 400,000 bpd.