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Business News/ Industry / Energy/  Reliance Industries eyes oil blocks in Venezuela

New Delhi: Reliance Industries Ltd (RIL) is evaluating investing multi-billion dollars in two-three oil blocks offered by Venezuela as it looks at countries from Myanmar to Canada to expand its overseas energy assets.

“We are looking at two things in Venezuela. One is, we have a long-term (crude oil) supply contract and we are looking at enhancing the quantities under this contract, possibly from next year," RIL executive director P.M.S. Prasad told reporters on sidelines of a FICCI event.

RIL currently imports about 300,000 barrels per day (bpd) of oil from Venezuela for processing at its twin refineries at Jamangar in Gujarat. It now wants to increase these volumes, possibly to 400,000 bpd.

“The second is, we are also looking at investing in Venezuela... They have given two-three opportunities for us to evaluate and make a decision. So, in the next few months, (we will) complete our evaluation and make a decision," he said.

Venezuela has offered two-three oil blocks. Years after it dropped out of a Oil and Natural Gas Corp. Ltd (ONGC)-led consortium for developing Venezuela’s giant oil fields, RIL is keen on taking a project to produce heavy oil in the South American nation. It last year signed a memorandum of understanding (MoU) with Petroleos de Venezuela, or PDVSA, to develop a project in the Orinoco extra heavy crude belt. Though Prasad did not elaborate on the “opportunities" offered by Venezuela,

RIL may be looking at the Boyaca 4 block and a separate section in the Ayacucho area of the Orinoco belt. Both these areas can produce 2,00,000 bpd (10 million tonnes a year) each.

He, however, said the project may involve developing the field and setting up an upgrader to convert the synthetic oil into oil that can be processed in refineries.

Last year, RIL had also signed a new agreement to buy more crude oil from Venezuela. It had in 2008 signed a deal to buy 150,000 bpd of oil, which was gradually raised to 270,000 bpd. Under the new 15-year agreement, the South American country would sell between 300,000 and 400,000 bpd.

RIL operates twin refineries at Jamnagar with a total refining capacity of 1.24 million bpd. Half of its crude diet can be heavy oil.

Prasad said RIL was looking at opportunities to invest in Mexico, Iraq, Canada and Myanmar. RIL was in 2009 supposed to bid with the Indian consortium of ONGC Videsh Ltd (OVL), Indian Oil Corp. (IOC) and Oil India Ltd (OIL) for one of the three giant oil blocks Venezuela was offering through auction. It, however, walked out of the consortium possibly due to delays in bidding.

After RIL’s exit, OVL-IOC-OIL teamed up with Repsol YPF SA, Spain’s biggest oil company, and Malaysia’s Petronas to make a successful bid for the massive Carabobo-1 project in Venezuela’s Orinoco heavy oil belt. The field, which had about 50 billion barrels of proven oil reserves, can produce a minimum of 400,000 bpd of oil.

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Updated: 03 Sep 2013, 08:24 PM IST
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