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Russia's LUKoil to set up JV with Venezuela's PDVSA in 2008

LUKoil Overseas, the international production arm of Russia's LUKoil, will set up a joint venture with the national petroleum company of Venezuela, PDVSA, the Russian company said Wednesday.

Andrei Kuzyayev, vice-president of LUKoil, the country's largest crude producer, spoke in advance of Venezuelan President Hugo Chavez's visit to the Russian capital, due to begin Wednesday, at which the controversial socialist leader will discuss fuel and energy cooperation and prospective arms deals. The LUKoil official said the company was in negotiations with oil-rich Venezuela on further exploration of the Orinoco River basin deposit. “Additional exploration is nearing completion at the Junin-3 block,” said Kuzyayev, who was elected Wednesday Russia's top representative on the Russia-Venezuela Council of Entrepreneurs. He said that to date, only the Russian part of the council has been formed, but that the parties agreed to hold a joint session of both sides by October.

All organizational issues such as the council's structure and budget, are expected to be solved by the end of the year, he said. “Relations with Venezuela have both a political and economic basis. We must create conditions for small and medium businesses to enter (the market of) Venezuela. Large companies must become a locomotive for smaller companies,” Kuzyayev said. (