Russian oil major LUKOIL is in talks to refine Venezuelan crude at its new Italian refining venture and seeks more projects with the South American country, an executive said.
"It can become an important element of building LUKOIL's relationship with Venezuela, which is interested in European markets," LUKOIL's Vice-President Andrei Kuzyaev told Reuters in remarks cleared for publication on July 22.
LUKOIL and PDVSA on July 22 signed a deal to push ahead with joint exploration of the Junin-3 deposit in the Orinoco belt.
"The recent acquisition of a share in the Sicilian refineries strengthens our position in talks with Venezuela as processing of Venezuelan oil at this refinery is possible and could be profitable," said Kuzyaev. Last month LUKOIL entered the west European refining busine s by forming a joint venture with Italy's second largest refiner ERG.
The venture will control ERG's Sicilian refining complex with combined capacity of around 320,000 barrels per day.
LUKOIL, one of the most active Russian investors in foreign energy assets, entered Venezuela in 2005 by signing an initial agreement on geological exploration at the Junin-3 deposit, to date its only project there. Kuzyaev, who is also the head of LUKOIL Overseas division, said that geological work has been practically completed and the company was awaiting the government's decison on whether to let it into a joint production project.
LUKOIL also holds 70 percent of the Condor oil deposit in Colombia and hopes that field, with reserves estimated at 35 million barrels, will turn out to hold as much oil as the country's largest field.
"We came to Colombia...for reserves comparable to those of the country's largest field, Cusiana-Cupiagua," Kuzyaev said.
The reserves of the Cusiana-Cupiagua project, run by BP, are estimated at 1.3 billion barrels.
"Our expectations have yet to be met, but we see potential in Condor and will go ahead with its geological exploration," he added.
LUKOIL plans to produce 7-14 million barrels per year from the project starting 2010 depending on the results of the geologial works, Kuzyaev said.
LUKOIL is 20-percent owned by US oil major ConocoPhillips and has a large network of filling stations in the United States, which it hopes to supply with South American oil.
The firm also views Africa as one of its potential growth regions and plans to expand exploration in Ghana and Ivory Coast in the next few years.