Italy’s Eni in $17-bn oilfield development pact with Venezuela’s PDVSA

Italian oil and gas company Eni SpA yesterday signed a $17-billion deal with Venezuela's state-owned oil company Petroleos de Venezuela (PDVSA), to develop crude oil fields and build a refinery in the Orinoco river basin.

Eni hopes to jointly drill for about 240,000 barrels of oil per day in the eastern Orinoco River basin during the 25-year deal, as a part of which the two will also build a refinery by 2016.

The two companies will invest $8 billion in developing the Junín 5 Block oil field, with ENI taking a 40 per cent and PDVSA remaining the majority 60 per cent.

They wiil also spend an additional $9 billion on the refinery,  with a daily processing capacity of upto 350,000 barrels of oil per day.

Eni said that the Junín 5 Block holds a certified 35 billion barrels of oil with recoverable reserves estimated in excess of 2.5 billion barrels of which Eni's share would be 1 billion barrels. Daily production for Eni will be close to 100,000 barrels per day at full field development.

PDVSA and Eni expect to reach an early production phase of 75,000 barrels per day with the first oil strike by 2013 and a long-term production plateau of 240,000 barrels daily in 2018.