Argentina and Venezuela Strengthen Links

Caracas, Venezuela, November 22, 2005—Argentinean President Nestor Kirchner came to Venezuela yesterday and signed a deal to build a gas pipeline between the two countries. Kirchner also confirmed Venezuela’s entry to the South American trade bloc Mercosur next month. Speaking in Puerto Ordaz in Bolivar state, Kirchner said Venezuela and Argentina, “have made many more advances than I had thought possible.”

The proposed gas pipeline would be built by the multinational oil company Petrosur. Petrosur was created in 2004 by Argentina and Venezuela as a joint venture of their state energy companies. Other Latin American public energy companies, such as Brazil’s, could also join in with Petrosur on the project. The pipeline would eventually be 6,000 km long and external estimates say it should cost $10 billion to build.

Hugo Chavez said he was confident that Paraguay, Uruguay, Brazil, and Bolivia would want to be involved with a project to secure energy, “to all of South America for the next 200 years." Bolivia has the second largest energy reserves in Latin America, but so far they have not been thoroughly developed.

Kirchner also confirmed that Venezuela would become a full member of Mercosur next month at a meeting in Uruguay. Kirchner said yesterday, “Venezuela will be made a full member of Mercosur. All that is left to decide are technical details.” Argentina’s Planning Minister, Julio de Vido, said Venezuela’s oil supplies along with, “Brazil´s industrial potential and Argentina’s agricultural output will provide Mercosur with unlimited horizon.”

Mercosur is a rival organization to the U.S.-led Free Trade Area of the Americas (FTAA). Speaking with Kirchner yesterday Chavez said the U.S., “proposes the FTAA. We have always said that would be impossible unless we wanted to commit suicide.” Kirchner is the first Latin American leader to visit Chavez after the Venezuelan President’s falling out with Mexico and the U.S. over rejection of the FTAA at the recent Summit of the Americas.

Venezuela is also helping Argentina by buying roughly $950 million in Argentinean public debt. There has also been an agreement to supply Argentina with 5 million barrels of low cost diesel fuel a year. On Monday Chavez said Kirchner is, “firm, honorable, and able to stand up to imperialist pressures, and has great support from the Argentinean people, a victim of Washington’s policy.”