PetroSA has held talks with its Venezuelan counterpart, PDVSA, on projects including oil exploration and the production of heavy crude oil in the Orinoco belt of Venezuela.

Everton September, the vice-president of PetroSA's new ventures unit, said yesterday that Chavez's signature was needed to formalise a memorandum of understanding.

He said the memorandum "will come into effect immediately upon signature.

PetroSA would like to acquire an oil-producing asset in Venezuela [and] receive a direct crude allocation from PDVSA in the short term, between six months and one year.

"In the medium term (between one and two years), offshore natural gas opportunities, opportunities that commercialise our gas-to-liquids (GTL) technology and liquefied natural gas opportunities will be investigated."

PetroSA operates one of the world's largest GTL refineries at Mossel Bay.

The firm is pursuing oil exploration in Equatorial Guinea, Gabon and Egypt.

September said no projects had been identified yet, and it was premature to speculate on the size of the Venezuelan investment or proposed output volumes.

He added that the deal with Latin America's biggest oil-producing company might be worth hundreds of millions of dollars.

Oil from Venezuela could be earmarked for PetroSA's new US$7 billion (N$54 billion) Coega refinery project, which would produce 250 000 barrels a day.

The refinery, expected to come on stream by 2015, would position PetroSA to export oil throughout southern Africa.

Venezuela is South Africa's third-largest trading partner within the Andean region, with total trade between the two countries valued at N$896 million last year.

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