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Wednesday, 19 November, 2008, 22:40 GMT | more >>

Chavez and Lula talk energy integration



By Upstream staff 

Photo by Reuters


The presidents of Venezuela and Brazil have pledged to speed up energy integration between the two countries in an effort to heighten the region's autonomy.

Brazil's President Luiz Inacio Lula da Silva and his Venezuelan counterpart, Hugo Chavez, want to advance talks on building a joint gas pipeline from Venezuela to Brazil and Argentina and producing oil jointly. Venezuela is one of the world's largest oil exporters and has major gas reserves.

Analysts, however, say the task of laying a pipeline across the heart of the Amazon region will face serious environmental and logistical challenges.

Lula also said they want to seal a joint venture in the Carabobo heavy crude field in Venezuela's Orinoco belt, with a 40% participation of Brazil's state-run oil company Petrobras.

"We showed our political will and now the representatives from Petrobras and (Venezuela's) PDVSA will discuss what is possible technically," Lula said.

But Petrobras reiterated in a joint statement with Venezuela's state oil company PDVSA that it was considering a stake in Carabobo of no more than 10%. Petrobras officials said earlier they were concerned about high costs of the project.

Similar discrepancies between both sides delayed a commercial agreement on a planned $4 billion oil refinery near Recife for several years. On Wednesday, Lula and Chavez agreed in principle PDVSA would take a 40% stake and Petrobras the remaining interest.

While Chavez frequently intervenes in PDVSA decisions, Petrobras is a publicly traded company and less at the whim of the government.

Lula thanked Chavez for making both companies think not only of profits but also of their social and economic responsibilities.

Both leaders said they were making history by joining countries that ignored each other for decades and depended on the US and Europe, and that their integration would help reduce dependence on foreign companies.

"Over 100 years all the oil went north. Never a Venezuelan oil tanker went south," said Chavez.

Bolivia's nationalisation of its gas industry in 2006 raised concerns in Brazil and Argentina of relying excessively on energy imports from neighbours, Reuters reported.

Bolivia lacks the foreign investment in new gas exploration after its nationalisation to meet its gas supply contracts with Brazil and Argentina. Now both countries are likely to import liquefied natural gas from the Middle East or some other supplier outside Latin America.


Friday, 28 March, 2008, 00:44 GMT  | last updated: Friday, 28 March, 2008, 00:44 GMT

Coming together: Venezuelan President Hugo Chavez and his Brazilian counterpart Luiz Inacio Lula da Silva
 

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