http://www.petroleum-economist.com/default.asp?page=14&PubID=46&ISS=25466&SID=721952

Venezuela

President Hugo Chavez has told Ecopetrol, the Colombian state-controlled oil company, that it will be barred from taking part in the country's Orinoco heavy-oil belt developments until Colombia's government reverses a decision to allow US counter-narcotics troops to use Colombian military bases. State-owned PdV suspended gasoline exports to Colombia, and is considering halting gas imports from the country.

The International Centre for Settlement of Investment Disputes will hear ExxonMobil's claim against PdV in October. In 2007, the national oil company nationalised the supermajor's stake in the Cerro Negro heavy-oil development. ExxonMobil says the government violated its rights as a foreign investor and is seeking over $12bn in compensation. President Hugo Chavez insists PdV will pay no more than the $0.75bn book value of the assets at the time they were seized.

A consortium of Russian oil firms, led by state-controlled Rosneft and Gazprom, are edging closer to securing the Junin 6 block in the Orinoco heavy-oil belt. The group estimates the block, which has more than 50bn barrels of heavy crude in place, could cost $30bn to develop and produce for 40 years. The government recently opened the possibility that Russian firms could secure more than one Orinoco block. The consortium, which also includes Lukoil, TNK-BP and Surgutneftegaz, plans to bid for up to four blocks on offer in the Carabobo area of the region when the country holds a delayed auction.

The Junin 7 block in the Orinoco heavy-oil belt is estimated to hold 31bn barrels of extra heavy oil in place, of which around 20% should be recoverable according to a reserves study by Repsol and PdV.

http://www.google.com/hostednews/afp/article/ALeqM5iAzIx4ZcmwiTT38lkYVBpxkKB3KQ

AFP) – Aug 15, 2009

MOSDOW — Russia and Venezuela envisioned on Saturday a joint venture to develop Venezuelan oil deposits, following bilateral talks that also touched on military contracts, Russian news agencies reported.

Russian Vice Premier Igor Sechin said a Russian consortium would team up with the Venezuelan national oil company Petroleos "to undertake a range of projects dealing with oil production and infrastructure construction".

It would focus on the Junin 6 block of the Orinoco heavy crude region, in the east of Venezuela, which has estimated reserves of 53 billion barrels.

Sechin was speaking in Saint Petersburg where he led the Russian side to a meeting of a bilateral intergovernmental commission, with the Venezuelan delegation headed by Vice President Ramon Carrizalez.

"With regards to Junin 6, the cost of this project could go up to 30 billion dollars (21.2 billion euros)," the vice premier said, quoted by the Interfax news agency.

While financing would come from the Russian consortium, the Kremlin is to support the venture by creating a Russian-Venezuelan bank and providing necessary equipment.

The six groups in the consortium -- including Lukoil, TNK-BP and Sourgoutneftegaz -- "are leaders in the petroleum industry and their financial situation is good," Setchin said.

Turning to military cooperation, Setchin spoke of future weapons contracts.

"Technical military cooperation is very important for the Russian economy ... It is particularly important during the economic downturn insofar as we have to support our businesses," he said.

Recalling that Venezuelan President Hugo Chavez has expressed interest in Russian weapons, he stated: "If the president said so ... he will do so."

Venezuela is a key partner for Russia in Latin America, a region long regarded as the preserve of the United States but one in which Moscow wants to have a higher profile.

From 2005 to 2007, Moscow and Caracas signed a dozen arms contracts worth 4.4 billion dollars.