Essar Group is planning to strengthen its foothold in the energy-rich Latin American countries by proposing a joint venture with Venezuelan state-owned oil and gas firm PDVSA to undertake engineering and construction of coal-fired power projects.

The EPC initiative of Essar in Venezuela would be spearheaded by its engineering arm Essar Projects. In fact, Essar Projects has already signed a memorandum of understanding with PDVSA’s engineering and construction arm to study engineering of a future coal-fired thermo plant in La Guajira state. This will later be expanded into a full-fledged joint venture initiative that will take up EPC contracts on a commercial basis, diplomatic sources aware of the development told FE.

An Essar Group spokesperson confirmed the developments in Venezuela and said: ?We keep on looking at growth opportunities in sectors whe-re we have a presence.? He, however, refused to give details saying that discussions were still preliminary.

But diplomatic sources said that Essar, like other Indian oil and gas companies such as ONGC Videsh, OIL and Reliance, has shown keenness to strengthen ties with the Venezuelan national oil firm with the aim of securing larger access to the nation’s rich energy resources. “The EPC initiative is just the beginning. We could see larger cooperation between Essar and PDVSA in the coming days,? said the official quoted earlier.

As part of this cooperation, Essar has also agreed to evaluate the construction of a potential gas compressor plant in Monagas state and has already signed a cooperation agreement to train Venezuelan personnel. The Indian firm has also agreed to create a JV aimed at transporting oil from the Orinoco heavy oil belt to Indian markets. ?The region is going to play an increasingly important role in energy security for India. Currently, Latin America contributes around 10% of India?s crude oil imports. The region has 15% of global reserves and new discoveries of oil will ensure it?ll become more important for India?s energy security,? R Viswanathan, a Latin America enthusiast and a former envoy to Argentina, said.