Venezuela, Russia’s Rosneft agree on $14 billion oil, gas investment

Venezuela and Russia’s top oil producer, Rosneft, have agreed on around $14 billion in investment in the South American OPEC country’s oil and gas sector, President Nicolas Maduro said.

Maduro met the chief executive of state-owned Rosneft, Igor Sechin in the company of the president of state oil company PDVSA, Eulogio del Pino, and National Assembly boss and Socialist Party No. 2 Diosdado Cabello.

“We had a great meeting and agreed on investment of over $14 billion,” Maduro said, adding the funds would go toward doubling Venezuela’s oil production.

PDVSA has formal ambitious targets to double national production to 6 million barrels a day by 2019, with 4 million of that projected to come from the Orinoco Belt, but few industry experts or foreign investors expect those goals to be met.

Rosneft said that the $14 billion dollars was the total amount of investments of the company in Venezuela during the lifespan of current and future projects.

It already invested $1.8 billion in 2010-2014, and it sees its own oil production in the country rising to 8 million tonnes per year (160,000 barrels per day) by 2019 from 1.6 million tonnes in 2014.

The company also added that if shale oil production in the United States and Canada declined, Venezuelan oil could step in to meet demand in those markets.

Fresh investment would be a boon for cash-strapped Venezuela, which is seeking to ramp up oil output to counter an economic crisis and the recent tumble in oil prices.

Russia was also tipped into crisis by last year’s sharp drop in oil prices, which was compounded by Western sanctions over the annexation of Crimea and what the West says it support for rebels in eastern Ukraine, causing sharp falls in the value of the rouble currency.

Russia denies direct military involvement in eastern Ukraine.

Rosneft and PDVSA signed a new contract for supplies of oil and oil products of Venezuelan production, the Russian company said in November. The document envisages supplies of over 1.6 million tonnes of oil and 9 million tonnes of oil products to Rosneft within five years.