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Italian player Eni SpA (E - Analyst Report) has formed a joint venture (JV) with Venezuela’s state-owned PDVSA for the purpose of exploring condensate reserves at the country’s giant Perla gas field development project.

The deal was concluded in a meeting in Caracas between Eni’s chief executive Paulo Scaroni with Venezuelan Petroleum Minister Rafael Ramirez. The duo also discussed various other projects in the region. The latest pact also reflects similar JVs between the pair on the Junin-5 heavy oil field project that was commissioned earlier in Mar 2013.

The Perla field is projected to hold reserves of about 170 million barrels of condensate. Eni will have a stake of 40%, while PDVSA will carry on with a majority stake of 60%. Overall, the Perla field is likely to generate 380,000 barrels of oil and 1.2 million cubic feet of gas per day.

Eni is also co-operator of Cardón IV, the operating company which manages the Perla super-giant gas field. It has reserves projected at about 17 Trillion cubic feet (Tcf) of gas in place, or 3.1 billion barrels of oil equivalent. Subsequent to the entry of PDVSA in the project, Perla shareholders will be PDVSA, Eni and Repsol, holding 35%, 32.5% and 32.5%, respectively.

Located near the coastline and 50 kilometers off the Paraguana Refinery Complex in Falcon state – the Perla – is one of the gas wells of the Rafael Urdaneta project. Eni is already linked to PDVSA and Repsol to develop the Cardon IV block, which lies within the Rafael Urdaneta project.

The Perla field is projected to have a development cost of $1.4 billion and was initially scheduled to be commissioned later this year. However, as a result of hindrances caused by recent elections, the production is not expected to begin before 2014.

Eni’s presence in the region dates back to 1998. The company was engaged in the development of the heavy oil block Junín-5 located in the Orinoco oil belt. The Junín-5 block has a capacity of 35 billion barrels of oil (boe) equivalent certificates in place.

Eni carries a Zacks Rank #4 (Sell). However, other Zacks Ranked #1 (Strong Buy) stocks – Range Resources Corp. (RRC - Analyst Report), China Petroleum & Chemical Corp (SNP - Analyst Report) and Dril-Quip, Inc. (DRQ - Analyst Report) – appear more attractive for the short term.

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