Venezuela and Panama Sign Energy Agreements

President Chavez signed a wide variety of energy cooperation agreements with Panama's President Torrijos. Among these are the amplification of Panama's pipeline, so that Venezuela can ship oil to Asia more easily.

Caracas, Venezuela, June 23, 2006—During a visit to Panama yesterday, Venezuelan President Hugo Chavez agreed to support a variety of energy related projects, such as the amplification and modernization of a Panamanian oil pipeline, the possible construction of a gas pipeline, the supply of Venezuelan oil to Panama, and the construction of a refinery in Panama, among other things.

Chavez visited Panama in order to participate in the 180th anniversary celebration of the “Anfictionic Congress,” that Latin American independence hero Simon Bolivar had organized in Panama and that was supposed to push for Latin American integration.

With regard to the modernization of Panama’s pipeline, Chavez said that it, “is today being underutilized and in addition we can give it bi-directionality, amplify its capacity in order to bring Venezuelan oil and pump it from the Caribbean to the Pacific.”

Venezuela has repeatedly indicated a strong interest in modernizing the Panamanian pipeline, which can carry oil from the Caribbean to the Pacific Ocean. The purpose of such a pipeline for Venezuela would be to reduce transportation costs in bringing oil from Venezuela to China and India, which it intends to supply in greater volumes.

Other energy-related memoranda of understanding that the two countries signed included a joint project for the supply of Venezuelan natural gas to Panama and the construction of a refinery with the capacity to process 150,000 barrels of crude oil per day.

Also, Chavez offered Panama to join the Petrocaribe agreement, which provides Venezuelan oil at favorable financing rates and allows countries to pay for oil shipments with products instead of cash. Almost all nations of the Caribbean are already part of this agreement. It is, “a system of oil supply guarantees that keeps growing every day and that more governments, peoples, and communities are joining,” said Chavez about the offer.

Reflecting on Simon Bolivar’s efforts to unify Latin America, Chavez said, “We are prepared to advance in an integration project that transcends the energy sector. It is about retaking Bolivar’s dream, the Protocols of the Isthmus. It is about giving form to a new integration, an integration that begins with the conscience, with the soul of these peoples…”

Chavez urged the Panamanian President, Martin Torrijos, to consider his government’s ALBA proposal, the Bolivarian Alternative for Latin America and the Caribbean, which is “based on what we advocate as a new model of Latin American integration, founded on solidarity, cooperation and economic complementation,” instead of just free trade, which the U.S. is pushing, said Chavez.

Responding to accusations that Venezuela is supporting Daniel Ortega in the upcoming presidential elections in Nicaragua, Chavez denied the charge that he had sent helicopters to Nicaragua and added, “There is a great hegemonic interest, from which we distance ourselves, that this good will and the Venezuela proposals to governments and parliaments end up being rejected or seen in a bad light, as a result of this campaign that is constantly being repeated.”