This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Russia Makes Inroads In Venezuelan Energy Sector

Is China falling behind?

Speculators are viewing this partnership as a watershed moment in Russia's attempt to capitalize on energy opportunities ahead of China.

Over the past few years, China has been aggressive in its attempts to participate in Venezuelan oil projects; however, to date it has not achieved as much progress as it might have liked. At present, it boasts one notably comparable inroad into that market, namely a JV between PDVSA and China National Petroleum. That agreement saw the China Development bank approve a $4-billion investment in Venezuelan energy firm Petrosinovensa, Reuters reported.

The confirmation that Rosneft will be investing at least $10 billion over the coming years has effectively thrust China out of the spotlight. The company's CEO told local media that with Russian participation, overall oil production in the region could reach 50 million tonnes per year, with his company's share of that estimated to be around 15 million tonnes, or 500,000 barrels per day.

The deal is a significant coup for Russia as Venezuela boasts some of the world's largest gas reserves, which, as per the government, amount to more than 195 Tcf. The South American nation is also the largest exporter of oil in the western hemisphere (and 10th largest in the world), and with 298 billion barrels, holds the world's largest proven oil reserves.

High risk vs. high reward

Although many deem Russia's progress as proactive in terms of boosting Venezuela's oil and gas output, others feel the deal will be largely influenced by — and at risk from — an often unpredictable political environment.

While OilPrice notes that Venezuela is known as a “petro-state” in that oil revenues account for 94 percent of its export earnings, 50 percent of its budget revenues, and 30 percent of its GDP, its energy sector has struggled over the past decade and since 2001 its overall oil production has fallen by roughly 25 percent; since 1997, oil exports have dropped by almost 50 percent.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs