Reliance, which operates the world's biggest refining complex on India's west coast at Jamnagar, last year signed a 15-year deal to buy up to 400,000 barrels per day (bpd) of heavy oil from PDVSA. RIL and PdVSA have also extended the term of this MOU signed between the parties last year by one year for continued cooperation.
Venezuela has been Reliance's top crude oil supplier since May 2012.RIL was considering multi-billion dollar investments in two to three oil blocks offered by Venezuela as it looked at countries from Myanmar to Canada to expand its overseas energy assets.
"We are looking at two things in Venezuela. One, we have a long-term (crude oil) supply contract and we are looking at enhancing the quantities under this contract, possibly from next year," RIL's executive director P.M.S. Prasad was quoted as saying.
A senior PDVSA executive said in New Delhi last year that the company was in talks for four blocks - Junin 1, Ayacucho 3, Ayacucho 8 and Boyaca 4. It is not clear whether Reliance is out of race for the remaining three blocks or still in negotiations with PDVSA.
Participation in Venezuelan oil exploration could help Reliance lock in supplies for its two Indian refineries that can handle heavy crude, which often costs less than lighter crude options and boosts refining margins.
Reliance's two refineries at Jamnagar in western Gujarat state can process 1.2 million bpd oil, about 28 percent of India's overall refining capacity. RIL currently imports about 300,000 barrels per day (bpd) of oil from Venezuela for processing at its twin refineries at Jamnagar in Gujarat. It now wants to increase these volumes, possibly to 400,000 bpd.
RIL wants to lift the share of its own oil used in overall processing by the two plants from almost zero at present to 25 percent to 30 percent, its executive director P.M.S. Prasad told Reuters in December 2011.
The signing of the Joint Study Agreement for Ayacucho Block 8 and the extension of MOU marks further strengthening of the long standing relationship between RIL and PdVSA as well as between India and Venezuela.