Reliance Industries Limited (RIL) is looking at investing in two to three oil blocks offered by Venezuela. This affirms with RIL’s strategy of expanding its overseas assets as it looks towards countries from Myanmar to Canada.
RIL currently imports about 3,00,000 barrels per day (bpd) of oil from Venezuela for processing at its twin refineries in Jamnagar in Gujarat. RIL would want to increase these volumes, to 400,000 bpd.
RIL Executive director PMS Prasad, talking on the sidelines at a FICCI event said, “We are looking at two things in Venezuela. One is, we have a long term (Crude oil) supply contract and we are looking at enhancing the qualities under this contract, possibly from next year. The second is, we are also looking at investing in Venezuela. They have given us 2-3 opportunities for us to evaluate and make a decision. So, in the next few months, complete our evaluation and make a decision.”
Although Mr. Prasad did not go into much detail about the kind of acquisitions planned in Venezuela, RIL may be looking at the Boyaca 4 block and a separate section in the Ayacucho area of the Orinoco belt. Each of these areas can produce 2,00,000 bpd (10 million tonnes) a year. He, however, said the project may involve developing the field and setting up an upgrader to convert the synthetic oil into oil that can be processed in refineries. RIL operates twin refineries at Jamnagar with a total refining capacity of 1.24 million barrels a day. Half of its crude diet can be heavy oil. Prasad said RIL was looking at opportunities to invest in Mexico, Iraq, Canada and Myanmar.
An announcement by the Venezuelan government said: “PDVSA (The State-owned Venezuelan company Petróleos de Venezuela) will sign an agreement with Reliance Industries to supply heavy crude oil that could reach 4,00,000 barrels per day (bpd) in the long term.” According to sources, Latin American and Caribbean nations are areas of interest for India to meet its energy needs. “We are looking very closely at the region where our oil imports have gone up to 9% of the total. Countries like Brazil, Bolivia, Colombia, Venezuela and Peru are of major interest to us,” they said. “In Venezuela, there are great opportunities in upstream and downstream for Indian companies. But the companies have to look at these opportunities in a strategic way, and whether they want to do it as joint ventures.”
RIL last year, had signed a new agreement to buy more crude oil from Venezuela. In 2008, it had signed an agreement to buy 1,50,000 bpd of oil, which was gradually raised to 2,70,000 bpd. Under the new 15 year agreement, Venezuela would sell between 3,00,000 and 4,00,000 bpd.