BELARUS NEWS AND ANALYSIS

DATE:

12/12/2007

Analysis: Venezuela bolsters Belarus ties

By CARMEN GENTILE
UPI Energy Correspondent

MIAMI, Dec. 12 (UPI) -- Venezuela has added Belarus to its growing list of partner countries to explore the oil- and gas-rich South American nation.

The new deal inked earlier this month in Caracas pairs Venezuela's state-run PDVSA and Belarus' Belorusneft.

The new deal to explore oil fields in western Venezuela builds on an already existing agreement between the two nations whereby PDVSA enjoys a 60 percent stake in all joint projects.

Venezuela and Belarus already enjoy a working oil agreement that officials in Minsk said Monday would provide the former Soviet country with 900,000 tons of oil per year, thereby lessening Belarus' dependence on Russia for its energy needs.

Venezuelan President Hugo Chavez praised his Belarusian counterpart, Alexander Lukashenko, in a recent trip to Minsk for agreeing to strengthen ties between the two nations.

The relations appear to play directly to Chavez's professed effort to forge new energy alliances to lessen his country's dependence on business from the United States, his country's largest customer despite simmering tensions. A European outsider such as Belarus has the making for a prime partner with a Chavez-led Venezuela, according to some analysts.

"I think the Belarus fits the profile of the kinds of countries that Chavez has shown interest in," Peter DeShazo, a former U.S. deputy assistant secretary of state for Western Hemisphere affairs and now Americas program director at the Center for Strategic & International Studies, told United Press International.

The Venezuela-Belarus energy alliance is the latest in a series of newly forged agreements by Chavez, some of which raised concerns and condemnation in the White House and on Capitol Hill.

Earlier this year, Venezuela and Iran inked a $4 billion deal to develop a block of Orinoco, with production slated to begin in two years. The Ayacucho 7 block is believed to hold more than 30 billion barrels of oil alone, making it one of the largest in the country.

A recent statement by PDVSA said Iran will build four oil rigs offshore Venezuela by the end of the year.

Venezuela's increased dealings with Russia and Iran, as well as China, play directly into Chavez's plans to shrink the portfolio of Western firms in the country.

Chavez has long asserted the Bush administration was keen on seeing him removed from power because it sees his populist ideals as a threat to the national and regional stability. Chavez administration officials have repeatedly asserted that if provoked by the United States, PDVSA would have no problem halting oil shipments to the United States.

Venezuela in May assumed majority control of its oil and gas operations, forcing foreign firms to accept the new conditions or face fines and expulsion from the country. Though most companies complied, both ConocoPhillips and Exxon Mobil Corp. pulled out of the country after a protracted struggle with PDVSA.

Their departure has left a production vacuum that PDVSA has yet to fill. Venezuela's oil output is believed to have slipped by more than 250,000 bpd from a year ago, according to the Paris-based International Energy Agency. Production has reportedly decreased from 2.6 million bpd to 2.37 million bpd.

Hoping to counter the shortfall, PDVSA recently announced it was investing $3.5 billion in new oil rigs, a much-needed injection of cash into improvements for a sector that some experts say has been abused by Chavez for his social programs.

Source:

http://www.upi.com/International_Security/Energy/Analysis/2007/12/12/analysis_venezuela_bolsters_belarus_ties/3267/