PDVSA, a state oil company, and Spain's Repsol had been in discussions regarding a financing deal for a joint venture in Venezuela. The funding for the joint venture was valued USD1.2 billion, said a top government official on Wednesday.

The announcement was made by Petroleum Minister Rafael Ramirez during his visit to Caracas. The funds would go to the Petroquiriquire joint venture. The joint venture would run mature fields in the east and west of the South American OPEC member nation.

According to Ramirez, the financing would be aimed at increasing the joint venture's output by 75000 barrels per day. This was from a total of around 40000 bpd that is currently produced in three of its fields.

If the deal would be signed, this would add around USD10 billion in loans that PDVSA had agreed this year.

Repsol had been working with PDVSA in an offshore natural gas project. PDVSA had been a key part of a consortium that had been seeking to explore the vast Orinoco extra heavy crude belt in Venezuela.