Russia, Venezuela edge closer to oil deal, talk arms

ST PETERSBURG (Reuters) – Russia and Venezuela yesterday moved closer to an oil venture deal and discussed arms  trade, forging a partnership that may drag Russia into a row  over the US military presence in
Colombia.

Venezuela’s President Hugo Chavez, due in Russia in September, said last week he was prepared to buy dozens of  Russian tanks to counter the US intention to increase a  military presence in Colombia.

“The president of Venezuela is one of the leading  international policy makers. He is a very strong personality and  a big friend of Russia,” said Russia’s Deputy Prime Minister  Igor Sechin.

“I know from experience if he said something he will  definitely do it,” Sechin told a news conference after talks  with Venezuelan Vice President Ramon Carrizalez when asked  whether Russia would sell tanks to Venezuela.

Sechin said military cooperation with Venezuela will help  Russia’s struggling military industrial complex cope with the  economic crisis but declined to comment further on the tank deal  saying it was for presidents to work it out.

Colombia’s government is expected to sign a deal this month  giving US forces increased access to military bases in order  to fight the cocaine trade and Marxist insurgents. Chavez has  blasted the plan as a threat to regional stability.

“We as a sovereign state must protect our people and in that  sense we can make arms purchases that we deem necessary,”  Carrizalez said. “These bases without doubt create a threat for  all Latin American countries.”

Russia, the world’s second largest oil exporter, wants to  revive Latin American ties cultivated during the Soviet era.  Sechin’s recent Latin American tour included traditional Soviet  allies Cuba and Nicaragua.    Russia and Venezuela are expected next month to present a  joint venture that aims to develop the Junin 6 block in the  Orinoco oil belt, which Venezuela says has the world’s largest  hydrocarbon reserves.

Sechin said Venezuela’s state oil company PDVSA and a  consortium of Russian firms will need to jointly invest $30  billion in Venezuela’s Junin 6 oil field.

“The venture with PDVSA may become a leader in oil  production in Venezuela,” Sechin said, adding that Ayacucho 2  and Junin 3 blocks, controlled by PDVSA ventures with TNK-BP and  LUKOIL could also be included in the joint venture.

Sechin said reserves in the Junin 6 oil block are estimated  at 53 billion barrels, potentially making it the biggest Russian  oil exploration project abroad, and will last for at least 40  years.  The Russian consortium includes Rosneft Gazprom,  LUKOIL and  Surgutneftegaz. It also intends to bid for blocks in the Carabobo Project.