Medvedev and Chevaz Agree on Joint Venture

Russian President Dmitry Medvedev and Venezuelan President Hugo Chevaz agreed to form joint ventures to pump crude oil and to increase military and nuclear cooperation yesterday in the first visit by a Russian president to the South American country.

Chavez and Medvedev will tour today the Russian atomic- powered Peter the Great Navy cruiser, which is visiting Venezuela along with three other Russian vessels. The ships will conduct exercises in the Caribbean with the Venezuelan navy in the coming days.

Chavez, a long-time critic of the U.S., praised Russia’s “resurgence” and called for an end to U.S. global economic hegemony, during a ceremony at the presidential palace in Caracas.

Venezuela, the fourth-biggest supplier of foreign crude oil to the U.S., is increasingly relying on investments from countries like Russia, China and Iran to boost oil output.

“Russia is back on its feet, and playing an important role,” Chavez said. “I’m committed to continue to work together like this, without letting up.”

Medvedev arrived in Venezuela after visiting Peru and Brazil as part of his Latin America tour. He will fly to Cuba today, winding up a week-long visit to promote economic and political ties in the region.

“The world is becoming multipolar,” Mikhail Margelov, chairman of the Foreign Affairs Committee in Russia’s upper house of parliament, said yesterday at the event in Caracas. “Latin America is also one of the poles of strength.”

“Russia is back in Latin America, Russia is back in Africa, and Russia is back in Asia. We are ready to work in markets where we can be competitive,” said Margelov.

OAO Gazprom and four other Russian oil companies will create a joint venture with Petroleos de Venezuela SA to pump and refine oil from the South American nation’s Orinoco Belt, Gazprom Deputy Chief Executive Officer Alexander Medvedev said yesterday in Caracas.

The companies will jointly produce oil from the Carabobo area, site of the biggest reserves in the Orinoco. The venture will also build a facility to refine tar-like crude into lighter, more valuable oil for export, Medvedev told reporters.

Other companies involved in the venture include OAO Rosneft, TNK-BP, OAO Lukoil and OAO Surgutneftegaz.

Chavez has been cozying up to Russia over the past few years, buying more than $4.4 billion in weapons and promising access to Venezuelan oil fields for Russian companies.

Venezuela’s Russian arms purchases include 100,000 Kalashnikov rifles, 50 military helicopters and 24 Su-30 jet fighters, according to a U.S. Defense Intelligence Agency report.

Chavez visited Russia in September and secured a $1 billion credit line to buy more Russian weapons.

Venezuela is Russia’s third-largest trade partner in Latin America. Trade more than doubled last year to $1.2 billion on Russian arms sales.

Beyond energy and arms, the countries have also agreed to expand industrial and financial agreements.

Russian Deputy Prime Minister Igor Sechin visited Caracas Nov. 6, signing agreements to establish direct airline service between two countries, build Russian cars in Venezuela, and form a $4 billion bi-national bank.

Moscow-based United Co. Rusal, the world’s biggest aluminum producer, has Russian government support in its attempt to build an aluminum mill in Venezuela. OAO AvtoVAZ, Russia’s biggest carmaker, is in talks with the Venezuelan government to start building an assembly plant in the South American country next year.

Author: Jo Amey