Under the agreement reached on Saturday in New Delhi, Indian state-controlled energy giant Oil and Natural Gas Corp (ONGC), which is scouring the globe to meet the country's ever-expanding fuel needs, will take a 49% stake in the San Cristobal oil field.
"For us to receive 49% plus the operatorship is ... a huge advance and with that I am now truly well positioned to commercialise exploration work," India's Petroleum Minister Mani Shankar Aiyar told reporters.
No financial details of the deal were available. The signing of the agreement came on the second day of a four-day visit by Venezuelan President Hugo Chavez to India.
As part of the agreement, one of six signed in New Delhi, PDVSA or Petroleos de Venezuela is taking a stake in ONGC's refining subsidiary, Mangalore Refinery and Petrochemicals Ltd.
Processing Venezuelan crude
The agreement between Venezuela, the world's fifth biggest oil exporter, and India, which imports 70% of its crude oil needs, will pave the way for the Mangalore refinery to process Venezuelan crude.
ONGC has been aggressively pursuing energy supplies abroad and taken stakes in fuel projects in Russia, Libya, Sudan and Qatar among other countries, and recently struck an agreement to import natural gas from Iran.
As India's economy, now growing at around 7%, continues to expand, its reliance on imported crude is expected to grow to around 85% in the next 20 years.
Chavez, who has said Venezuela is keen to share its "oil potential" with India, has struck oil deals with various countries including large ones with China since last year.