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The joint venture is between Russia’s Rosneft and Corporacion Venecolana del Petroleo (CVP), a subsidiary of state-owned Petroleos de Venezuela S.A. (PDVSA).
The companies will extract oil and associated gas at the Carabobo-2 (“Northern”) and Carabobo-4 (“Western”) blocks of the Andean nation’s oil-rich Orinoco belt.
The deal was signed in September last year – Rosneft will hold a 40 per cent stake in the joint venture.
Operating on the area of 340 square kilometres (131 square miles) in the states of Anzoategui and Monagas, the joint venture will run for an initial term of 25 years.
Rosneft CEO Igor Sechin said earlier that Rosneft will invest $16 billion in the project to develop the Carabobo-2 bloc.
Commercial oil production at the bloc is expected to hit 400,000 barrels per day.
According to Venezuelan Petroleum and mining minister Rafael Ramirez, joint Russian-Venezuelan oil extraction is to reach one million barrels a day by 2021.
So far, Russian companies are involved in five extraction projects in the country.
In a separate development, PDVSA and Russian heavy machine production facility Uralmash signed on Wednesday a memorandum of understanding to jointly produce drilling rigs.