Venezuela’s Chavez Strengthens Cooperation in Uruguay, Argentina, and Brazil

On a four-day whirlwind tour of three key allies, Venezuela’s President Chavez signed and reviewed agreements with the governments of Uruguay, Argentina, and Brazil, which are to promote integration and cooperation between the countries.

Caracas, Venezuela, August 12, 2005—On a four-day whirlwind tour of three key allies, Venezuela’s President Chavez signed and reviewed agreements with the governments of Uruguay, Argentina, and Brazil, which are to promote integration and cooperation between the countries.

Uruguay: Ten agreements, refinery, & 25-year oil supply commitment

During his first stop in Uruguay, where Chavez met with President Tabaré Vazquez, the two presidents signed ten cooperation agreements. Among these was a commitment for both countries to promote the Social Charter of the Americas within the Organization of American States (OAS). The Social Charter is a document the Venezuelan government has been drafting, which, if adopted by the OAS, would commit all member countries to basic social rights, just as the OAS democratic charter commits them to the upholding of political rights.

Other agreements the two countries signed included commitments to fight poverty, to create a joint commission for the evaluation of existing investment projects, to promote PetroSur—the continent-wide oil company—and to promote tourism between both countries, among other agreements.

During his brief visit Chavez also toured a Uruguayan refinery, La Teja, near Montevideo, which Chavez said Venezuela would help bring to full production capacity, so it could process 50,000 barrels of Venezuelan crude per day. Also, part of the project is to eventually double the refinery’s capacity and refine Venezuela’s extra-heavy crude from the Orinoco Oil Belt. Chavez lamented that Venezuela has refineries around the world, but not in the Southern Cone of Latin America.

To improve the refinery, “The technical, legal, market and option studies will take six months … if the decision is made to build a new plant, it will take at least five years of work and more than $600 million,” said Uruguay’s oil company president Daniel Martinez.

Part of Venezuela’s commitment to Uruguay would be to guarantee Uruguay’s oil supply for the next 25 years.

Argentina: Ship building

Chavez’s next stop, on Thursday, was Buenos Aires, Argentina, where he met President Nestor Kirchner. Chavez and Kirchner signed agreements that renewed their commitment to earlier agreements involving Venezuela’s supply of fuel oil and gas and for Argentina to construct tankers for the Venezuelan oil company’s fleet. The ship building agreement, which will generate at least 1,500 jobs, is for four tankers, worth $200 million. The first tanker will be named Eva Peron, after the former Argentinean President’s wife.

Chavez also visited one of the two shipbuilding plants, Rio Santiago, where the Venezuelan tankers will be built and one of the Venezuelan state oil company’s tankers is currently undergoing repairs.

Brazil: Refinery, increased trade, and Lula’s persecution

Late Thursday night Chavez arrived in Barsilia, Brazil, where he had a dinner meeting with President “Lula” da Silva. According to official statements, the main purpose of this meeting was to review progress made on agreements the two countries had signed earlier. Among these is a commitment to raise trade between Venezuela and Brazil from $880 million in 2004 to $3 billion in 2005.

Another agreement the two presidents reviewed was the effort to create a refinery for the processing of Venezuelan crude in Pernambuco, Brazil. Chavez said that construction on this refinery would hopefully begin before the end of the year. Brazilian authorities were still scouting the exact location for the refinery.

Chavez and Lula also discussed the possibility of building a gas pipeline that would connect Venezuela’s Caribbean coast with Brazil, so as to create an infrastructure network for the energetic integration of Latin America.

Chavez said that Venezuela is offering Brazil’s oil company Petrobras the opportunity to produce oil in Venezuela’s Orinoco Oil Belt, which holds the world’s largest reserves of extra-heavy crude. “We want to give priority to Latin America to exploit this immense oil wealth,” said Chavez.

After his meeting with Lula, Chavez said, “Without the participation of Venezuelan and Brazilian businesspeople this alliance will not work. Together we will achieve greater levels of liberty.”

Chavez also commented on the political crisis Lula is currently facing where several members of his government have been accused of corruption. “I am absolutely certain that Lula is an honest man, a great partner…,” said Chavez, adding, “I feel that there is an action of the old political class, of the Brazilian right … it is a massive attack against the president of Brazil and this must come from some planning center here within Brazil or—watch out—from outside the country.”