HANOI -(Dow Jones)- State-run Vietnam Oil and Gas Group, or PetroVietnam, said Friday it will set up an oil joint venture with Venezuelan Petroleum Corp. in the second half of this year.

The joint venture, PetroMacareo, will produce oil in the Junin-2 offshore block in Venezuela’s Orinoco belt, PetroVietnam said in a statement.

State media said in May that Venezuelan Petroleum Corp., a subsidiary of Venezuela’s state oil firm PdVSA, will hold a 60% stake in the joint venture, while PetroVietnam Exploration Production Corp., a leading production unit of PetroVietnam, will hold the remaining 40%.

PetroMacareo will be able to produce a combined 200,000 barrels a day of heavy and extra heavy oil from the Junin-2 block, which will then be processed into light crude oil to supply to an oil refinery in Vietnam, said Voice of Vietnam radio.