UPI Energy Watch

Venezuela, Russia partner on oil.

During his trip to Moscow, Venezuelan President Hugo Chavez announced in a news conference that Caracas and Moscow have plans to form the world's "largest petroleum consortium," Iran's Press TV reported.

Chavez told the press that Russia and Venezuela will jointly invest in oil ventures through Venezuela's state-run Petroleos de Venezuela and Russia's LUKoil Holdings, Rosneft and Gazprom.

Petroleos de Venezuela and Gazprom will operate the joint venture out of Venezuela. Chavez said one day he hopes to expand the company's ventures from Russia and Venezuela to other Latin American nations as well.

Funding will come through a new bank Chavez authorized that will be part of Petroleos de Venezuela.

The companies from the two countries will share technology, and Russia will help to expand and develop Venezuela's energy industry.

The decision of the two countries, which long have been sources of geopolitical tension, to become partners has caused some concern in the United States and Europe.

Adding to the concern, Chavez left Moscow to travel to Beijing where he signed a deal tripling oil shipments to China.

Increased exports to China means less oil will be available to sell to the United States.

"We're no longer the backyard of the United States," Chavez was quoted as saying.

Another major oil and gas find in Brazil.

Brazil's state-run oil company Petrobras, along with Portugal's Galp Energia, announced they have confirmed a new find of light oil and natural gas in the joint venture Jupiter offshore field. The field is located off the coast of Rio de Janeiro.

The venture is currently analyzing samples to try to determine how large the newfound reserves might be.

Petrobras has an 80 percent stake in Jupiter, and Galp Energia holds a 20 percent stake.

Through its many new finds over the last two years, Brazil is working to significantly increase its oil exports.

The oil and gas strike originally was announced on Jan. 21, but until recent weeks, drilling had been suspended for unspecified "operational reasons."

Galp Energia has stakes in three other blocks in the Santos basin.

Occidental buys out its field partner.

The U.S.-based oil and gas exploring company announced it will sign a purchase deal to buy Plains Exploration and Production Co. Occidental will acquire all of PEPC's oil and gas assets in the Permian Basin in West Texas, New Mexico and Colorado. The deal is reportedly worth $1.25 billion.

Currently, the production that Occidental will acquire is about 4,300 barrels of liquids per day and 52 million cubic feet of gas per day, though the properties reportedly have about 92 million barrels of oil equivalent in proven reserves.

Before the buyout, Occidental was holding 50 percent interest in properties that it now will completely own. Occidental said in its announcement it will now hold 129,000 acres in the Piceance Basin in Colorado.

The deal, which will help PEPC by wiping out about $1 billion of its corporate debt, is expected to be closed before the end of the year.

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Closing oil prices, Sept. 26, 3 p.m. London

Brent Crude oil: $98.80

West Texas Intermediate crude oil: $103.88

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(e-mail: energy@upi.com)