Rosneft and PDVSA signed Heads of Agreement to establish a joint venture for implementation of the large-scale project for production, treatment and sale of natural gas at the offshore fields Patao, Mejillones and potentially Rio Caribe in Venezuela.

The Heads of Agreement is concluded in elaboration of the Memorandum on the joint projects development that was signed by the parties in June 2015 at the St-Petersburg International Economics Forum.

The new Heads of Agreement, concluded with the support from the Ministry of Petroleum and Mining of the Bolivarian Republic of Venezuela, provides that the parties shall move to the practical stage and perform the in-depth feasibility study on the project. In parallel the parties plan within the short time limit agree and provide for the approval of the Ministry of Petroleum and Mining the complete set of legally binding agreements regulating establishment of the joint venture.

According to the Heads of Agreement the parties shall each have 50% equity share in the joint venture. Rosneft shall be the project operator.

The gas production at the three fields is expected to be up to 25 million cubic meters per day (9 billion cubic meters per annum), providing the potential to develop the world-class export-oriented pipeline or LNG project.

PDVSA and Rosneft for many years successfully cooperate at the crude oil projects in Venezuela. The conclusion of this Heads of Agreement for implementation of the offshore natural gas project marks an important step for both companies, enabling to bring their well established partnership to the new level.