Bloomberg News

Venezuela Says OPEC Would `Welcome' Russia as Member

September 27, 2008

Venezuelan Oil Minister Rafael Ramirez said OPEC would welcome Russia, the world's largest energy supplier, as a member of the group that already supplies more than 40 percent of the world's oil.

Russia would have to take the decision to join the Organization of Petroleum Exporting Countries, Ramirez told reporters in Lisbon today. ``Within OPEC they would be welcome of course. There will be more cooperation from Russia.''

Russian Energy Minister Sergei Shmatko said Sept. 25 that Moscow wants greater control over oil prices and will present a proposal to OPEC in December. Venezuela is the fourth-biggest foreign supplier of crude oil to the U.S.

OPEC's membership will drop from 13 to 12 in 2009 on Indonesia's decision to quit after the biggest oil producer in Southeast Asia became a net oil importer. OPEC decided at a Sept. 9 meeting to cut output by about 500,000 barrels a day.

``At the last meeting, we removed the levels of overproduction there were in the market,'' Ramirez said. ``We think that is sufficient. That will take some time to have a result.''

Crude oil prices have declined about 27 percent from the record $147.27 a barrel reached on July 11.

``The market is well supplied with oil,'' Ramirez said. ``The price fluctuations have to do with financial speculation.'' He said Venezuela has no plan to change its production levels.

Trade Agreements

Venezuela produces 3.36 million to 3.38 million barrels a day, Eulogio Del Pino, a vice president at state-controlled oil company Petroleos de Venezuela SA, or PDVSA, said Aug. 22. Production should rise to 3.45 million barrels a day by year-end, Del Pino said.

``Venezuela has the biggest oil reserves in the world,'' Venezuelan President Hugo Chavez said today. ``We are certifying up to 300 billion barrels.''

Chavez was in Portugal yesterday, after visiting Russia and China, to attend the signing of agreements between Venezuela and the Portuguese government and local companies.

PDVSA and EDP-Energias de Portugal SA, the biggest power company in Portugal, signed a memorandum of understanding for the development of a liquefied natural gas project from reserves at the Blanquilla East block in northern Venezuela, according to a statement.

Efacec Capital SGPS SA, a Portuguese maker of power- generation and industrial equipment, will supply and build power substations, control centers, transformers and other equipment for Venezuela's government-run Corporacion Electrica Nacional SA.

Yesterday, Russian Energy Minister Shmatko said Venezuela and Russia agreed to create a joint oil company that will invest ``tens of billions of dollars'' to develop fields in Latin America and beyond. PDVSA will be joined in the venture by Russian oil companies OAO Gazprom (GAZP), OAO Rosneft, TNK-BP, OAO Lukoil and OAO Surgutneftegaz, he said.

To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net

To contact the editor responsible for this story: Guy Collins at guycollins@bloomberg.net


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