The state-owned oil companies of Russia and Venezuela have agreed to a $14 billion project to double oil and gas output in the South American country's rich Orinoco Oil Belt.
Venezuelan President Nicolas Maduro announced the deal at a Socialist Party event broadcast on state television on Wednesday following his talks with Petroleos de Venezuela (PDVSA) president Eulogio del Pino, Rosneft chief executive Igor Sechin and National Assembly Speaker Diosdado Cabello at the Miraflores Palace in Caracas.
"We had a great meeting and agreed on investment of over $14 billion," said Maduro in the television address, according to Russia Today.
Maduro said the investment will be used to develop the Orinoco Belt, which holds some of the largest crude oil reserves in the world.
"The alliance has allowed the government to convert the investments for the welfare of the Venezuelans and to hold the price of hydrocarbons at the international level," Cabello said, according to the Russian news agency Tass.
"A sensible growth of the energy sector allows the countries like Venezuela to gain large revenues as the oil sector contributes to education, technology and housing construction," Sechin said, according to Tass.
Confirming the deal, PDVSA said on Twitter that the two countries will create a company to boost crude production and expand crude extraction in the Orinoco Belt, where Rosneft already has joint ventures with PDVSA, according to Rigzone.
PDVSA is targeting to double national production to 6 million barrels a day by 2019, including 4 million barrels coming from the Orinoco Belt.
PDVSA also said that Rosneft had proposed increasing its stake in the Petromonagas joint venture from the current 16.7 percent to 40 percent, the maximum allowed for a foreign partner in oil joint ventures in the South American country.
The deal follows the agreement of Maduro and Russian President Vladimir Putin during talks in Moscow in January. The agreement was to increase investment and participation of Russian companies and their share of joint ventures in the Orinoco Belt and other projects.
The agreement aims to protect the commodity market and the strategic energy alliance of the two countries, according to Maduro.
The Rosneft-PDVSA deal also adds to the contract the two companies signed in which PDVSA will supply 1.6 million tons of oil and nine million tons of oil products to Rosneft within five years.