Venezuela's state-owned oil company Petroleos de Venezuela SA (PDVSA) signed a deal on Monday with Iran's state company Petropars to explore the heavy oil deposits in Ayacucho Block 7, a 540 square km block in Venezuela's Orinoco River basin.
The study will form the basis of a future joint venture to extract crude. The Venezuelan government would have a 51 percent stake in any new joint venture that emerges from the study, the PDVSA said.
The Orinoco region has reserves of heavy oil and bitumen, tarry substances which can be used to make synthetic oil. Four heavy-crude upgrading projects in the area currently produce as much as 600,000 barrels a day of synthetic oil.
The project is part of a larger plan to document Venezuela's proven oil reserves, to vastly increase the value of oil to the nation. Venezuela's proven oil reserves are around 81 billion barrels, but the government believes that some 235 billion barrels of deposits are lying, undocumented, in the Orinoco belt.
The government has divided the Orinoco belt into 27 blocks, many of which will be explored in cooperation with foreign oil companies.
Venezuelan President Hugo Chavez believes that Venezuela has the world's largest oil reserves, but that the bulk of it has not been proven. Saudi Arabia has now the largest proven oil reserve with 262 billion barrels.