Venezuela’s Oil Company Promotes Latin American Integration

Venezuela state oil company president Ali Rodriguez, outlines some of the accomplishments of his tour of Latin America's southern cone, which involved closer integration with Brazil's Petrobras oil company and the opening of a PDVSA subsidiary in Argentina.

In Brazil, the president of PDVSA reaffirmed Venezuela’s message of integration on the basis of complementarity and solidarity between the nations of the region which, through the Petroamérica initiative, would control 11.5 percent of world oil reserves, would tap into the full potential the region’s overall capability and would help raise the material and spiritual conditions of over 530 million people

“We welcome the various meeting held between our two enterprises, PDVSA and Petrobras. These meetings are aimed at identifying -and I am sure we will succeed in doing so- common areas and projects which will benefit from the wide range of capabilities acquired during so many years of experience and which are intended to strengthen Latin American and Caribbean integration.” This statement was made by PDVSA president, Alí Rodríguez Araque, following a meeting with Petrobras president, José Eduardo Dutra, and other members of the board of directors of the Brazilian energy corporation.

“Venezuela plays a strategic role in ensuring global oil security and does so through PDVSA and the various enterprises engaged in hydrocarbon-related activities in our country. These enterprises include Petrobras, which we hope will strengthen its involvement in the near future”, the PDVSA president stressed.

Rodríguez Araque also met with Rio de Janeiro governor, Rosinha Garotinho, and delivered a speech entitled “Latin-America- Petroamérica Integration”. He also offered a press conference to the Brazilian and international press as part of his agenda of activities within the framework of the PDVSA (Petróleos de Venezuela) participation in the Rio Oil & Gas 2004 event being held at the Riocentro Conference Center in the capital of the state of Río de Janeiro.

Thus, the PDVSA president ended an intense and successful integration promotion tour through the Southern Cone, which included the inauguration of the offices of Interven Venezuela Inc. in Buenos Aires, Argentina. The event was attended by Julio de Vido, the Argentine Minster of Planning, and by Felipe Solá, governor of the Province of Buenos Aires. Likewise, on a visit to La Asunción, the PDVSA president also met with Paraguayan president, Nicanor Duarte, and with Ángel Recalde, president of Petropar, the Paraguayan oil company, to forward the Venezuela-Paraguay Economic Cooperation Agreement.

“Brazil has gained vast experience in off-shore exploration and drilling and has made remarkable technological progress. What insurmountable obstacles, if any, could possibly prevent enterprises like Petrobras and PDVSA from going into partnership with each other, from operating jointly and from reaping the benefits to be gained from opportunities like those being discussed here? Actually, there aren’t any”, Rodríguez Araque pointed out.

Rodríguez Araque went on to explain that Mexico, Venezuela and Brazil are undoubtedly major oil producers and that their products had the common feature of consisting mainly of heavy crudes. The frequently recurrent problems relating to price differentials -as is happing at present- are well known.

Coordinating policies intended to ensure the stability of the prices of our heavy crudes and to value them, for example, through the implementation of broad conversion capacities, would seem to be a very simple question of logic. “What significant and insurmountable obstacles, therefore, could there be to Pemex, Petrobras and PDVSA working together on the study and implementation of joint projects in this regard? Neither do we believe that there are obstacles.”

Rodríguez Araque highlighted that, “When taken at random, these examples, sum up the fairness and transparency of an idea like the creation of Petroamérica, which was proposed by President Hugo Chávez Frías. It was also conceived as a strategic alliance between the local energy operators in order to strengthen them and to convert them into efficient and effective tools for integration, on the basis of complementarity and solidarity.” The Petroamérica initiative would enable the nations of the region to control 11.5 percent of world oil reserves and to tap into the full potential of a market of over 530 millon people.

The PDVSA president reiterated that Venezuela would continue playing its role as one of the major suppliers of hydrocarbons. In this regard, PDVSA has developed a plan which, in only years -between 2004 and 2009 -requires an investment of 37 billion dollars in order to raise the production capacity above 5 millon barrels. The bulk off this investment, some 27 billion dollars, will be financed with the company’s resources, but an additional contribution of approximately 10 billion dollars will be have to come from third parties.

“We are being taught a lesson by the experiences of history: regional integration is a matter of concern to our States and our governments. Of course this does not imply the exclusion of private business sectors. The quid rests on viewing integration as a matter of concern to the State so that our effort will be guided by political will, with an economic outlook and with a social purpose”, Rodríguez Araque said.