Tehran, Caracas to sign $2bn oil contract

Iran and Venezuela are expected to sign a USD2-billion deal to jointly develop the Venezuelan Dobokubi oil field in the heavy-crude rich Orinoco Belt in the near future, a report says. Iran's Petropars Oil and Gas Compny, a subsidiary of the National Iranian Oil Company (NIOC), and Venezuela’s state-run oil firm, Petroleos de Venezuela (PDVSA), will soon ink the deal, which aims to increase the production capacity of Dobokubi oil field to 40,000-60,000 barrels per day (bpd) from the current 15,000 bpd. According to the 25-year contract, Iran will invest USD500-520 million in the oilfield, said Mohammad-Javad Shams, the executive director of Petropars. Iran and Venezuela will have 26 percent and 74 percent stake in the joint venture respectively. Latin American countries have in recent years built up diplomatic and trade ties with Iran, while their relations with such countries as the United States have been greatly reduced amid popular demands for ending dependence on Washington. Iran and Venezuela signed two memoranda of understanding (MoU) in January 2012 to expand cooperation in the fields of industry, science and nano-technology, as well as economy.