Russia returns to western hemishpere with Hugo’s help

April 3, 2010 06:01

Putin Signs Accords With Chavez in Venezuela Trip. Nukes for Venezuela? More foreign policy fiasco by Obama.

By Daniel Cancel and Maria Kolesnikova at

Russian Prime Minister Vladimir Putin signed billions of dollars in energy, agriculture and commercial accords with Venezuelan President Hugo Chavez today in Caracas during his first visit to the OPEC nation.

Under the agreements, a group of Russian energy companies including OAO Gazprom and OAO Lukoil will work with Petroleos de Venezuela SA in an $18 billion project to develop an oil field that will eventually produce 450,000 barrels per day, Oil Minister Rafael Ramirez told reporters on March 31.

Chavez, who has visited Russia eight times during his 11 years in power, is strengthening ties with governments critical of U.S. foreign policy as he seeks financing and offers stakes in untapped oil reserves. The Venezuelan leader has spent more than $4 billion on Russian rifles, helicopters and fighter jets in what he says is an attempt to protect the country from a possible U.S. invasion.

“We’re building a new world, and only a balanced world can guarantee peace,” Chavez, 55, said today on state television. “Russia and Venezuela will be closer each day.”

As minority partners with PDVSA, the Russian energy group will help develop the Junin 6 heavy oil block in the Orinoco belt, initially producing 50,000 barrels of oil per day. The group is made up of Gazprom, Surgutneftegaz, Lukoil, TNK-BP and Rosneft Oil Co.

Putin also met with Bolivian President Evo Morales in Caracas before returning to Moscow following a wave of explosions in Russia that President Dmitry Medvedev said would be met with a “brutal” response.

Nuclear Plant

Venezuela and Russia are set to open a binational bank to finance development projects, while Venezuela is also willing to work with Russia to construct a nuclear power plant for a peaceful energy program in the South American country, Chavez said.

Putin said there are still “many forces” that impose rules and pressure other countries to limit trade and vowed to continue providing Venezuela with military equipment. He didn’t specify what those forces are.

Venezuela hasn’t tapped a $2.2 billion Russian credit line to buy military equipment, Putin said. If the U.S. doesn’t want to sell Venezuela spare parts for fighter jets and weaponry, then Russia will continue to do so, he said.

The oil venture between PDVSA and the Russian companies will require technology to refine heavy crude into lighter oil for export. The Russian energy group, Consorcio Nacional Ruso, paid $600 million of a $1 billion bonus payment to Venezuela today to access the crude reserves, Putin said.


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