Mumbai: Iran and Venezuela will jointly invest $4 billion in a project in the South American country''s heavy-crude-producing Orinoco Belt, Venezuelan state oil firm PDVSA said on its website.

The joint investment would be made in the Ayacucho 7 block, which had an estimated 31 billion of the 1.3 trillion barrels of extra-heavy crude believed to exist in the 55,000-sq. km. Orinoco Belt, located in east-central Venezuela, PDVSA said...

>Venezuelan energy minister Rafael Ramirez, who is also the president of PDVSA, said in the statement that ''the work of certifying (the reserves) is being carried out and that oil production in the Ayacucho 7 block is expected to begin within two years.

>Venezuela and Iran, both large exporting countries whose governments condemn US ''imperialism'', have signed a series of 33 bilateral energy agreements. The joint investment plan is one of the accords signed in recent years.

>Included in these agreements is the creation of a bilateral and international company, ''the product of the synergy'' between PDVSA and Iranian state oil firm Petropars ''to undertake joint projects in third countries'' and build oil tankers, Ramirez said.

>The Venezuelan government on 1 May, assumed operational control over projects in the Orinoco Belt that produce 600,000 barrels a day, relegating the US firms Chevron, ExxonMobil, Britain''s BP, France''s Total and Norway''s Statoil to the status of minority partners of PDVSA.

Venezuelan president Hugo Chavez is working more with state oil producers from other countries after the government took control of heavy-oil ventures in the Faja from international companies. The country needs to increase drilling to prove and develop heavy- oil reserves in the region estimated at 260 billion barrels.

To pay for the Iran joint venture, Venezuela is expected to tap funds, where Chavez has moved as much as $25 billion from the central bank, taxes and oil royalty revenue. The project''s construction, however, isn''t guaranteed, observers said.

During a visit by Chavez and Ramirez last week, Venezuela also agreed to help Iran with a shortage of gasoline.

``Iranians have requested to buy gasoline from us, and we have accepted their demand,'''' Ramirez told the Tehran newspaper Shargh in an interview July 3. He declined to provide the amount of fuel requested.

Iranian companies will build four Aframax tankers and offshore oilrigs, Petroleos de Venezuela said in a statement. Offshore rigs are expected to be in place in the Gulf of Venezuela by the end of this year.

Venezuela and Iran also will form a joint company for projects in other countries, the statement said. Luis Vierma, Petroleos de Venezuela''s vice president for exploration and production, said June 12 that his company may explore for oil and natural gas in Vietnam, Bolivia and Argentina.

Venezuelan leaders also have met in the past three months with energy ministers from Sudan and Myanmar, which are seeking foreign investment in oil and gas production.

>