Belarus and Venezuela will build a gas pipeline between the states of Barquisimeto and Barinas in western Venezuela, the country’s President Hugo Chavez announced on Monday. The move is a sign that Caracas is anxious to attract foreign capital to develop its huge unexplored gas reserves and energy infrastructure, although many of its announced initiatives lack transparency.
The two countries also agreed to build factories for oil production and gas distribution tools, extend Caracas’ gas distribution network, and construct a power plant in Cumana, Sucre.
Belarusian media also reported on Tuesday that Caracas and Minsk will expand the Lama 1 and Lama Lago Blocks in the state of Zulia.
Co-operation between Caracas and Minsk has always been loudly trumpeted, but lacked transparency. Viktor Sheiman, the assistant for Belarus special missions, was quoted as saying on Tuesday that commercial trade between the two countries could reach $2 billion in 2011, although Interfax was not able to confirm this figure on Tuesday.
Last year, Chavez agreed to supply the former Soviet republic with 30 million tons of oil over three years from 2011 in a deal he claimed was worth as much as $19.4 billion.
The two countries formed a joint venture in 2007 named Petrolera Bielo Venezolana to develop oil in the state of Anzotegui. The venture, in which Venezuela state-controlled company Petróleos de Venezuela (PDVSA) holds a 60% stake and Belarus 40%, began producing oil in 2010, though PDVSA has not given details on production.
Last week, Interfax learned that a new Russo-Venezuelan bank called Evrofinance Mosnarbank will have $4 billion of start-up capital, much of which will be used to finance energy projects in the two countries. The organisation will give Moscow a foothold in the Venezuelan energy industry, although there are similar concerns about the lack of transparency in Evrofinance’s activities.
A spokeswoman for VTB, a stakeholder in Evrofinance, told Interfax last Tuesday that the bank has already opened an office in Caracas, and that it was already involved in “certain Russo-Venezuelan projects”, without providing details.
Interfax understands that the Venezuelan partner in Evrofinance was initially meant to be PDVSA, but that Caracas later decided to be represented by FONDEN, an organisation that pumps the country’s oil revenue into Chávez’ social initiatives. This may make decision making less transparent, because FONDEN’s budgets are not seen or audited by the country’s treasury.
Erich Arispe, Venezuela’s sovereign risk analyst at Fitch Ratings, agreed that using FONDEN will make the Venezuelan government move money around. “It is difficult to evaluate the quality and pace of FONDEN investments because of lack of transparency,” the New York-based analyst told Interfax last Wednesday.
Caracas hopes that foreign capital will help it produce up to 12 billion cubic metres of gas per year from the Dragón, Patao, Mejillones and Río Caribe gas fields in its Mariscal Sucre project, located in the shallow waters bordering Trinidad and Tobago. The price tag of the project has been put at $8 billion. Gazprom was among the companies originally chosen to develop Mariscal Sucre, part of Venezuela’s Delta Caribe Oriente network of planned offshore gas developments.
Last Tuesday, Orlando Chacin, the director of PDVSA, said that Caracas was “not desperate, but open” to possible associations to develop its huge reserves.private]
Caracas’ big plans dogged by transparency concerns
The two countries also agreed to build factories for oil production and gas distribution tools, extend Caracas’ gas distribution network, and construct a power plant in Cumana, Sucre.
Belarusian media also reported on Tuesday that Caracas and Minsk will expand the Lama 1 and Lama Lago Blocks in the state of Zulia.
Co-operation between Caracas and Minsk has always been loudly trumpeted, but lacked transparency. Viktor Sheiman, the assistant for Belarus special missions, was quoted as saying on Tuesday that commercial trade between the two countries could reach $2 billion in 2011, although Interfax was not able to confirm this figure on Tuesday.
Last year, Chavez agreed to supply the former Soviet republic with 30 million tons of oil over three years from 2011 in a deal he claimed was worth as much as $19.4 billion.
The two countries formed a joint venture in 2007 named Petrolera Bielo Venezolana to develop oil in the state of Anzotegui. The venture, in which Venezuela state-controlled company Petróleos de Venezuela (PDVSA) holds a 60% stake and Belarus 40%, began producing oil in 2010, though PDVSA has not given details on production.
Last week, Interfax learned that a new Russo-Venezuelan bank called Evrofinance Mosnarbank will have $4 billion of start-up capital, much of which will be used to finance energy projects in the two countries. The organisation will give Moscow a foothold in the Venezuelan energy industry, although there are similar concerns about the lack of transparency in Evrofinance’s activities.
A spokeswoman for VTB, a stakeholder in Evrofinance, told Interfax last Tuesday that the bank has already opened an office in Caracas, and that it was already involved in “certain Russo-Venezuelan projects”, without providing details.
Interfax understands that the Venezuelan partner in Evrofinance was initially meant to be PDVSA, but that Caracas later decided to be represented by FONDEN, an organisation that pumps the country’s oil revenue into Chávez’ social initiatives. This may make decision making less transparent, because FONDEN’s budgets are not seen or audited by the country’s treasury.
Erich Arispe, Venezuela’s sovereign risk analyst at Fitch Ratings, agreed that using FONDEN will make the Venezuelan government move money around. “It is difficult to evaluate the quality and pace of FONDEN investments because of lack of transparency,” the New York-based analyst told Interfax last Wednesday.
Caracas hopes that foreign capital will help it produce up to 12 billion cubic metres of gas per year from the Dragón, Patao, Mejillones and Río Caribe gas fields in its Mariscal Sucre project, located in the shallow waters bordering Trinidad and Tobago. The price tag of the project has been put at $8 billion. Gazprom was among the companies originally chosen to develop Mariscal Sucre, part of Venezuela’s Delta Caribe Oriente network of planned offshore gas developments.
Last Tuesday, Orlando Chacin, the director of PDVSA, said that Caracas was “not desperate, but open” to possible associations to develop its huge reserves.private]