Russian company Rosneft plans to invest $500 million in the development of oil fields in the Orinoco oil belt in Venezuela. The agreement on additional investment was signed on Friday night, Feb. 19, 2016 in the presence of the President of the Bolivarian Republic Nicolas Maduro, Venezolana de Television TV channel said.
“According to the law about the nationalization of the oil industry, an investment of $500 million will be made for the Venezuelan oil industry. In the era of the global crisis and the economic war, we receive the investment that we need for the future,” said Maduro.
In accordance with the new document, the share of Rosneft in Petromonagas project has been increased by 40 percent.
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On February 19, the authorities of the South American country announced the creation of the Strategic Development Zone in the oil-bearing zone in the area of the Orinoco River.
The oil-bearing Orinoco Belt in the states of Anzoategui, Monagas, Bolivar and Guarico counts 55,000 square kilometers. The fields located in the area, contain more than 235 billion barrels of recoverable heavy and extra-heavy oil. These oil fields are considered probably the largest oil fields in the world.
Earlier, Russia, Venezuela, Saudi Arabia and Qatar agreed to freeze oil production on the level of January 11.
Oil prices to hit $200
Noteworthy, President of Ecuador, Rafael Correa, said that oil prices may sore up to $200 per barrel because of the termination of investment in the oil sector and the closure of drilling rigs due to their unprofitability against the backdrop of low oil prices, ABI news agency said.
The head of Ecuador said that the talks between Russia and Saudi Arabia were a positive sign for the market. According to him, the market underestimates possible consequences of the meeting of representatives of the world’s two largest oil exporters.
“The sooner the price will find its equilibrium at a reasonable level, the better for producers and consumers, the better for our planet,” Correa told reporters after visiting session of the government of Ecuador, held in the city of Chillanes the province of Bolivar.
The president of Ecuador, the country that has smallest oil reserves among all OPEC members, believes that one needs to resolve the problems of oil prices as soon as possible.
“The reduction in investment, which is going through the oil sector, the decommissioning of hundreds of drilling rigs, including in the U.S., which at these prices can’t make a profit, all this in the medium term will lead to higher prices up to $200,” said Correa.
- Ecuador joined the Organization of Petroleum Exporting Countries (OPEC) in 1973.
- In 1992, the Ecuadorian government decided to pull out from OPEC, having refused to limit oil production to cartel’s quota and pay annual fee of $2 million to the budget of the organization.
- In 2007, after Correa was elected President of Ecuador, the country returned to the OPEC and has since remained a member of the cartel.
- However, Ecuador has the smallest oil and gas reserves among other OPEC members.
- In 2015, the country produced the daily average of 545,000 barrels of oil, or 1.7 percent of OPEC’s entire oil production.
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