Venezuela will hike the amount of oil it is sending to Reliance Industries (RELI.NS) and signed a new 15-year supply contract with the company on Tuesday, the oil minister said.
Oil Minister Rafael Ramirez said the South American OPEC nation was currently sending 270,000 barrels per day to Reliance under a 2008 agreement, an amount that would increase to between 300,000 bpd and 400,000 bpd.
Ramirez told reporters that Reliance was keen to help the Venezuelan state oil company PDVSA develop a project in the Orinoco extra heavy crude belt.
"We are going to work together in the Ayacucho area ... and particularly in Boyaca block 4," he said after meeting Reliance executives in Caracas. "We have advanced a lot and we are looking for strong partners for these big investments."
Under President Hugo Chavez, Venezuela has been seeking to diversify its oil sales, which make up about 96 per cent of its total export income, away from its biggest traditional customer, the United States.
On Tuesday, Ramirez said PDVSA was exporting an average of 640,000 bpd to China, which has become a key source of funding for Chavez's socialist administration. Ramirez said total exports to Asia would soon pass PDVSA's goal of 800,000 bpd.
The Venezuelan government is pinning hopes for its oil industry on a string of ambitious projects to develop the Orinoco belt, which is one of the biggest mostly-untapped reserves of hydrocarbons left in the world.
The Ayacucho and Boyaca areas, in which Reliance has expressed interest, each have the capacity to pump some 200,000 bpd, Ramirez said.
"We are going to review the development plan and see if they will participate in it," he said.
Reliance and PDVSA also plan to work together on studies of how to update and improve Venezuela's refinery network, as well as PDVSA's plans to tap offshore natural gas reserves, including the long-delayed Mariscal Sucre project, which is due to begin extraction before the end of this year.