INTEGRATION. Presidents agree to create two Brazilian-Venezuelan joint ventures and to assign the pipeline’s construction.
A moving forward to integration.
One of the two joint ventures created will operate a crude oil field in Venezuela and the other one a refinery in Brazil.
Michael Astor | AP
MANAUS –Brazil and Venezuela agreed to forge ahead with two joint ventures between their state-run oil companies and a natural gas pipeline that would stretch across the Amazon rainforest.
President Luiz Inácio Lula da Silva and Venezuela's Hugo Chávez on Thursday signed a series of accords to speed the projects that had been agreed upon earlier but had gotten bogged down in bureaucracy. "With these partnerships we are showing that South America can resolve its energy problems," Silva said.
Outlining the joint ventures between state oil companies, Chávez said one company would operate Carabobo I, an extra-heavy oil field in Venezuela's Orinoco Basin. Petróleos de Venezuela SA, PDVSA, will provide 60 percent of the capital for the Carabobo project, with the remainder coming from Petróleo Brasileiro SA, Petrobras.
Lula expressed his commitment to pursuit the approval of Venezuela's entrance into Mercosur. Another company would operate an oil refinery in the Brazilian state of Pernambuco with 60 percent of the capital coming from Petrobras and 40 percent from PDVSA.
In December 2005, Silva and Chávez laid the refinery's cornerstone but cooperation between the two companies stalled and Petrobras recently began talking about building it without Venezuelan help.
Chávez called the projects " the nerve of (South American) integration," adding that they would " shield (Silva) from an energy crisis." Silva also said they would soon select a company to develop a project for a natural gas pipeline from Venezuela to Brazil's northeast.
He expressed his willingness to work in order to assure that Brazil's congress would ratify Venezuela as a full member of the Southern Cone Common Market, or Mercosur.
"With these partnerships we are showing that South America can resolve its energy problems."
The two leaders are opponents of U.S.-backed efforts for a Free Trade Area of the Americas. But Venezuela's bid to join Mercosur is encountering resistance from lawmakers in Brazil who must ratify the expansion. So far, Argentina and Uruguay have ratified Venezuela's entry in the group while Brazil and Paraguay have not.
