Italian energy company Eni has signed an agreement to invest five billion euros ($7 billion) in Venezuela’s state oil company over the next seven years.
As well as developing the Junin 5 oilfield in the Caribbean Sea, the money will go towards building a refinery and an electricity generating plant.
Petroleo de Venezuela and Eni will begin early production from Junin 5 next year and hope to reach 240,000 barrels per day by 2018, Venezuela’s energy minister said.
OPEC member Venezuela is pinning its hopes for reviving its stagnant oil sector on a string of ambitious projects, including Junin 5, to tap its vast Orinoco extra heavy crude belt — one of the world’s biggest, as yet untapped, reserves of crude.
Venezuelan Energy Minister Rafael Ramirez said early production from Junin 5 was set to begin at 50,000 bpd next year
Last month Ramirez said that President Hugo Chavez’s government expected Chinese and Italian banks to provide new loans totalling 3.9 billion euros ($5.5 billion) this year to develop joint venture projects in the Orinoco belt.
Earlier this week Libya’s government said it was halting all cooperation with ENI because of its ties with anti-Gaddafi rebels.
ENI is the biggest foreign oil company in Libya and has had a presence in the North African country since the 1950s.
A senior Libyan official told Reuters earlier this month that the government had begun negotiations with Russian and Chinese firms on taking over ENI’s projects in Libya after the Italian firm withdrew its staff.
ENI, like most other international oil companies with investments in Libya, suspended operations there after violence broke out in February following a rebellion against Gaddafi’s rule.