Eni, the Italian oil and gas group, plans to invest $4bn in Venezuela, making the biggest commitment by a western oil company since President Hugo Chávez began to take control of the country’s oil projects in 2005.

Eni has reached agreement in principle with PDVSA, Venezuela’s state-owned oil company, to develop an area of the Orinoco belt – on some measures the world’s largest oil reserve.

The investment would expose Eni to the risk of further expropriation by Mr Chávez, while giving it access to Venezuela’s huge reserves ahead of its European and US competitors.

Paolo Scaroni, Eni’s chief executive, and Rafael Ramírez, Venezuela’s energy minister, were expected to sign the deal in Caracas last night, in the presence of Mr Chávez and Massimo D’Alema, Italy’s foreign ­minister.

The deal is the most concrete sign yet of Venezuela’s enthusiasm for foreign investment to revive its ailing oil industry.

It also reflects Eni’s strategy of being among the first big oil companies to invest in politically risky countries. It is, for example, the biggest international oil company in Libya, where it has operated since 1959.

Eni has only just resolved its dispute with Venezuela over the Dacion oil field, where the government took control in 2006. Venezuela forced Eni to accept a settlement worth $700m – less than the asset’s book value – before it would agree to the new investment plan.

On Friday PDVSA was in court in London, trying to lift an order, secured by ExxonMobil in January, that froze an estimated $12bn of assets in connection with a dispute over Venezuela’s Cerro Negro heavy oil project, pending arbitration proceedings in New York.

Exxon walked away from the project after Venezuela moved to take control last year. The court is expected to rule on the issue next week.

Mr Chávez’s government has been keen to sign deals with other western oil companies in an attempt to show that Exxon and ConocoPhillips, which also walked away from its heavy oil project last year, are isolated in the industry.

Other western oil companies, including StatoilHydro, Total and Royal Dutch Shell, have recently signed up preliminary agreements to look at possible investment opportunities in Venezuela.

Total, for example, last month signed two joint study agreements with PDVSA to look at reserves in another area of the Orinoco belt.

Eni’s plans are much more advanced, however. It hopes to begin production at a rate of 30,000 barrels per day in 2010, and step up to 300,000 b/d by 2014.

In a statement, Eni said it would conduct joint studies of the area with PDVSA, and “upon the successful completion of the joint studies...the award of the prospective area to a PDVSA-Eni joint venture will be requested and the development plan will then be sanctioned.”

The project would conform to the new contract terms imposed by Mr Chavez, giving PDVSA 60 per cent, and Eni 40 per cent of the joint venture. Its total investment cost has been estimated at $10bn, including the upgrading of a plant to convert the heavy oil of the Orinoco Belt into crude that can be sold on world markets. Eni’s share would be $4bn.

The deal gives Eni access to resources estimated at 2.5bn-3bn barrels of oil, adding about 10 per cent to the company’s resource base. Eni’s proven reserves under the definition used by the US Securities and Exchange Commission are about 7bn barrels of oil equivalent.

David Thomson of Wood Mackenzie, a consultancy, said that although there was undoubtedly political risk in Venezuela, “there is an incredible amount of oil down there.” He added: “It is heavy oil, so it is expensive to get it out. But with the oil price remaining so robust, it is a very big prize to win.”