Foreign Correspondence

[Amaunet]

Venezuela flexes oil muscle

US sees oil and Chavez's ambitions as a troublesome mix

By Jim Bencivenga / csmonitor.com
April 20, 2005, updated 12:30 p.m.

US Secretary of State Condoleezza Rice may be in Moscow, but she has Caracas on her mind.

Ms. Rice, who arrived in Russia Tuesday for talks with that country's leaders is "concerned" about some arms sales in Latin America, specifically Venezuela, reports Bloomberg News.

The Russian government played down US concerns by countering that any of its proposed arms deals with Venezuela are in line with international agreements and international law.

Prior to Rice's trip, the US State Department issued its own accusations saying that Venezuela's purchase of 100,000 Russian Kalashnikov rifles, Brazilian helicopters and Spanish patrol boats, might find its way into the hands of Colombian "insurgents."

The Bush administration has also accused Venezuela President Hugo Chavez of having a "poor human rights record and of meddling in the internal affairs of neighboring countries," reports Bloomberg.

Venezuela signed a $120 million contract for Russian military helicopters that includes attack, assault and transport aircraft last month. The purchases are the largest for the country's armed forces since Venezuela's President Hugo Chavez took office in 1999....

The arms are intended to beef up security along the Colombian border where kidnappings and armed incursions by Colombian irregulars are common, Venezuela's information ministry said.

Venezuela is also studying the purchase of Russian MIG-29s, the Russian press has reported.

For its part, Venezuela, the "Saudi Arabia of Latin American" maintains a heightened wariness about US foreign policy vis-a-vis its oil reserves, reports India Daily.

Last week, Mr. Chavez celebrated the second anniversary of a failed coup to overthrow his government by swearing in "commanders of a new military reserve" patterned after Fidel Castro's local militias, which Chavez says are "meant to deter aggression against his country," reports the BBC.

Twenty-thousand reservists paraded before Mr Chavez at the main military barracks in Caracas. The new formation, which the president wants to become a two million-strong force in the near future, will be directly under his command. The move comes amid growing tension between Venezuela and the US.
Chavez claims the ultimately unsuccessful April 2002 coup was backed by US interests. Believing he will face more such coups, Chavez has expanded his relations with Russia, China, India and Iran, says India Daily.
The oil asset of Venezuela makes it vulnerable. But China, India and Russia have interest in the same. [For Chavez] that may make some difference. The BRIC alliance (Brazil, Russia, India and China) will oppose any invasion or external intervention in Venezuela. It will be of interest to see how BRIC will defend its Venezuelan oil interests in case of a similar crisis.

Venezuela currently supplies the United States with over 15% of its oil, making the South American nation its 4th largest supplier, after Saudi Arabia, Canada, and Mexico.

On related energy matters, Houston-based Citgo Petroleum Corp., owned by Venezulea's state oil company, PDVSA, announced plans on Wednesday to sell two of its eight US refineries, reports the Houston Business Journal.
[Oil Minister Rafael Ramirez] reiterated previous assertions that Venezuela does not intend to sell all of Citgo's assets, which include about 13,000 service stations in the United States.

Ramirez and Venezuelan President Hugo Chavez have complained that Venezuela's contracts with refineries in the US are unprofitable for Venezuela and constitute a subsidy for the US economy.

They have said the same thing about the country's production contracts with US and multinational oil companies and have warned that all of these operating agreements will have to be rewritten with higher fees paid to Venezuela and with greater control given to PDVSA.

Chavez has said he wants to diversify the client list for Venezuela's oil, and in recent months he has struck a series of energy accords with neighboring countries, as well as China and Spain.

In his weekly live television show, Chavez called on fellow Venezuelans "to follow the example of Don Quixote" reports The CBC.
Let us all read Quixote to feed ourselves once again with that spirit of a fighter who went out to undo injustices and fix the world," he said. 'To some extent, we are all followers of Quixote.'

Chavez's remarks came ahead of a planned [one million book] giveaway of the novel. On April 23, free copies of the book will be given away by the Venezuelan government in the country's public squares.

Quixote is the central character in Miguel de Cervantes' Don Quixote, the 17th-century work that is widely regarded as history's first novel.

In the story, a would-be knight, depicted as brain-adled from reading too many chivalric romances, travels the Castillian countryside righting imaginary wrongs. His most famous battle is against imaginary giants which are, in reality, windmills. The knight of the woeful countenance is accompanied by his faithful, more realistic servant, Sancho Panza.

How much the dreamer, or realist, Chavez turns out to be remains an open question.





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