Joint Oil Venture between Russia and Venezuela

A giant oil consortium to invest in joint oil ventures is planned by Russia and Venezuela.

Venezuela’s President Hugo Chavez said, "They've offered us the chance to create an oil consortium...the largest in the world".

State oil company Petroleos de Venezuela SA, PdVSA, and Russia's Lukoil Holdings, TNK, OAO Rosneft and OAO Gazprom are all to be included in the consortium.

At a time when both countries seek more clout on the world stage, Russian and Venezuelan relations will be brought to a new level by creating this new consortium.

Venezuela's communications ministry said in a statement that the ambitious venture would initially develop projects in Venezuela, and later in other Latin American countries.

Developing projects would require considerable amounts of capital, Mr Chavez said, and called for the creation of a PdVSA Bank to help finance these projects.

A bank controlled by Venezuela's state oil company would add yet another layer of responsibility to PdVSA. Over the last year, the company has created a series of new units that differ from its core business, including a construction company and a food distribution network.

Author: Jo Amey