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Russia, Venezuela to set up bank JV

  Russia’s prime minister has approved a draft agreement with Venezuela to jointly establish a bank to finance bilateral energy and other projects.

The bank, to be founded by major Russian banks VTB and Gazprombank and Venezuela’s treasury and state oil company Petroleos de Venezuela S.A., is to be headquartered in Moscow and have a branch in the Latin American state. There have as yet been no reports on its charter capital or the founders’ stakes.

The bank is to provide services to corporate clients, mainly those engaged in oil and gas production in Russia and Venezuela, as well as in the petrochemical and power industries, metal production, machine-building, infrastructure projects.

Prime Minster Vladimir Putin has ordered the Finance Ministry, Gazprombank, VTB and other involved agencies to finalize the agreement and sign it with Venezuela.

President Dmitry Medvedev and Venezuela’s Hugo Chavez reached a tentative agreement on the bank during the Russian leader’s first visit to the Latin American state last November. Media reports then said the leaders had also decided to use national currencies in mutual payments.

Venezuela’s PDVSA and Russian oil and gas firms, including state-run oil giant Rosneft, Russian-British TNK-BP, Siberian producer Surgutneftegas and independent crude producer LUKoil, have been in talks to set up a consortium for joint production and refining.

Russia has, however, urged legislative guarantees for its long-term investment in the sector from Venezuela, one of the world’s largest oil producers with about 87 billion barrels of proven conventional oil reserves. (