OREANDA-NEWS. Russian state-owned Rosneft signed a one-year preliminary supply contract for medium sour Urals crude with Venezuelan state-owned PdV.

PdV plans to use the Urals to blend with extra-heavy crude from the Orinoco oil belt during upcoming maintenance at three Orinoco upgraders and its Sinovensa crude blending facility at Jose on the Caribbean coast.

PdV expects to start receiving the Urals in Venezuela early in second half 2015, a senior PdV official tells Argus.

The contract includes an option to extend supplies for an additional two years.

Rosneft said earlier today that it signed a term sheet with PdV for one to three years of Urals supply. "Further negotiations will determine the volume and pricing of the possible deal," Rosneft said. The agreement was signed by Rosneft chairman Igor Sechin and PdV chief executive Eulogio del Pino at the St. Petersburg International Economic Forum.

Venezuela?s own light crude production, including 30?API Mesa and 39?API Santa Barbara from aging fields in PdV?s eastern division, has been declining.

Sinovensa, a joint venture with China?s state-owned CNPC, will shut down in August 2015 for up to 60 days of maintenance, PdV said yesterday.

The PetroSanFelix upgrader, formerly known as PetroAnzoategui, will shut down for up to 60 days in October 2015. PetroSanFelix is 100pc owned by PdV.

The PetroPiar upgrader will shut down for up to 60 days from August 2016. PdV and Chevron hold 70pc and 30pc in PetroPiar, respectively.

PetroMonagas, in which PdV and Rosneft hold 83.3pc and 16.7pc, respectively, will suspend operations for up to 60 days from October 2016.

The PetroCedeno upgrader already underwent maintenance from December 2014 to end-January 2015. PdV imported Algerian Saharan Blend to blend with the crude associated with PetroCede?o during the shutdown of the upgrader.

PdV holds 60pc of PetroCedeno. France?s Total and Norway's Statoil hold 33.3pc and 9.7pc, respectively.

PdV says Sinovensa and the four upgraders are currently processing around 830,000 b/d of diluted crude oil, which includes around 30pc naphtha used to transport the crude via pipeline. The naphtha is stripped out at the plants and shipped back to the oil belt for re-use.

During the maintenance, PdV plans to debottleneck the Jose plants to increase processing capacity in order absorb slowly rising Orinoco production.

PdV is stepping up the frequency of maintenance at the upgraders to every two to three years, compared with a previous four-year cycle. The facilities are prone to corrosion because of the acidity and heavy metals associated with the extra-heavy Orinoco crude.