Japan, Venezuela sign broad oil, gas cooperation

TOKYO, April 6 Mon Apr 6, 2009 12:43pm BST

TOKYO, April 6 (Reuters) - Japan and Venezuela agreed on Monday on a broad cooperation to develop oil and gas projects in the Latin American nation, deepening bilateral relations to help diversify sources of energy for the resource-poor Asian country.

State-affiliate Japan Oil, Gas and Metals National Corp (JOGMEC), Inpex Corp and Mitsubishi Corp will pursue a joint feasibility study with Venezuela on the Orinoco oil belt in the next two years, Energy Minister Rafael Ramirez said at a signing ceremony in Tokyo.

The oil belt may potentially have reserves of up to 6 billion barrels, and the ability to produce about 200,000 barrels per day, said Ramirez, who is also the head of the state oil company PDVSA [PDVSA.UL].

Venezuela also agreed with four Japanese trading houses, Mitsubishi, Itochu Corp, Mitsui & Co and Marubeni Corp, to begin participating in the development of a gas field for liquefied natural gas, Ramirez said.

If realised, it could allow much of the LNG to be brought over to Japan beyond 2013, he said.

Separately, Venezuela signed a memorandum of understanding with Japan Bank fo International Cooperation (JBIC), Mitsubishi and Itochu for loans totalling $1.5 billion to finance the upgrade of two refineries.

This follows a credit line of $3.5 billion opened in 2007. [ID:nN26514286]

The Venezuelan delegation, including President Hugo Chavez and Ramirez, was visiting Tokyo on Monday.

PDVSA is struggling to pay providers and partners following a tumble in oil prices over the last six months, and may need to seek financing this year for new projects in the Orinoco belt. (Reporting by Chang-Ran Kim, Yuko Inoue, James Topham; Writing by Chikako Mogi)