Russian oil producer Lukoil plans to build a refinery in Venezuela with the South American country's state company to process heavy oil from the Faja de Orinoco region.
Lukoil and PDVSA will probably finish talks early next year on forming a venture to develop the Junin 3 block and refine the oil into products for export, the head of Lukoil's overseas arm, Andrei Kuzyaev, said Tuesday in Moscow. Kuzyaev didn't identify the possible export markets.
Venezuela is counting on companies from outside the U.S. to certify reserves and replace declining production beyond Faja. President Hugo Chavez's government gave PDVSA controlling ownership of oil assets in the region, prompting Exxon Mobil Corp. and ConocoPhillips to abandon some projects.
Houston-based ConocoPhillips owns 20 percent of Lukoil.
Lukoil is asking Venezuela for guarantees that costs won't jump at the Junin 3 project. Exploration work at the field has found "billions of barrels of heavy oil," Moscow-based Lukoil's deputy chief executive officer, Leonid Fedun, has said.
