RIL in Talks with Venezuelan Oil Companies Regarding Exploration of Heavy Oil Production

The Venezuela PDVSA engages in a discussion with RIL (Reliance Industries Limited) and ONGC (Oil & Natural Gas Exploration about their prospects of investing in the South American country’s oil sector and augmenting this segment in the country. According to Fadi Kabboul, PDVSA Executive Director mentioned at the Petrotech 2012 conference that they have been in talks with these two energy giants about the exploration of three oil fields- Jumin, Ayacucho and Boyaca. He also stated that the company would surge its exports to 2.8 million barrels per day (bpd) by 2018 vis-à-vis 1.2 billion bpd in 2012 and is gearing to generate 3.13 million bpd in 2012 in comparison to 2.98 million bpd last year.

The company is expecting an investment of $236 billion in its oil sector in between the period of 2013 and 2018 from other global investors. Recently, RIL had engaged in a fifteen-year heavy crude  oil supply contract with the PDVSA with the objective of strengthening the heavy oil fields at Venezuela and increasing the supply to 3,00,000 -4,00,000 barrels to the company’s two refineries in Jamnagar. This contract will also pave way for an increased cooperation from RIL with respect to provision of technical assistance and providing assistance for execution of large-scale projects catering to areas of offshore upstream, refining, and other downstream projects. PDVSA also announced that it would increase its overall shipments to 5,18,000 barrels a day to India, by 2018.

There are chances, RIL may buy the Boyaca 4 block along with a specific division in the Ayacucho area of the Orinoco belt where each of them have a production capacity of  2,00,000 bpd (10 million tonnes a year) .

In 2009, RIL was in talks with the Indian conglomerate including ONGC Videsh Ltd, Indian Oil Corp and Oil India Ltd to bid for one of the three huge Venezuelan blocks, which however was later dropped owing to delay in bidding by others.

RIL has always intended to build strong ties with Venezuela for its Jamnagar refinery, which requires a supply of over 62 million tons per annum capacity. RIL ‘s sophisticated refineries are capable of processing cheaper Venezuelan crude with high margins.