South Africa eagerly awaits cheaper oil from Venezuelan Chavez
Caracas, Venezuela, 1 September 2008. Today, Venezuelan President Hugo Chavez travelled to South Africa to start his first two day official visit and meet meet with his counterpart Thabo Mbeki. Venezuela has been negotiating 11 cooperatin agreements but would only pen three during Chavez´s visit to Pretoria. In a statement, the South African Department of Foreign Affairs, said this meeting falls "within the context of South Africa's priority to consolidate relations with Latin America with a view to fast-track the developmental agenda of the South"
The two-day discussions will be focussed around reviewing the current bilateral relations between the two countries as well as opportunities that exist in the areas of energy, mining, trade and the armament industry.Other areas for possible future engagements with Venezuela include agriculture and public works. This will also be explored during the meetings. According to the department, the strengthening of South-South relations through cooperation in the Non-Aligned Movement (NAM), the Group of 77 and China will also be considered. Presidents Mbeki and Chavez are expected to sign the Framework Agreement on Cooperation between South Africa and Venezuela. South Africa Minister of Minerals and Energy, Buyelwa Sonjica and the Venezuelan Minister of Energy and Petroleum are also expected to sign an Energy Cooperation Agreement and a Memorandum of Understanding on Energy Cooperation.
According to local newspaper The Start, very little in known about President Chavez but there is mounting expectation over his cheaper oil offer to South Africa.
Hugo Chavez is a name which probably means little to most ordinary South Africans. Yet, when he arrives here on an official state visit at the beginning of this coming week, he could be bearing gifts. Chief among those might be cheaper fuel, which would benefit all of us. Chavez, the president of Venezuela, has made a habit of using his country's immense petroleum wealth to make political points. He once, famously, sent a load of cheap heating fuel to poor districts in New York - no doubt to irritate the American government, which does not like the South American politician. Chavez has already invited our parastatal fuel company, PetroSA, to his country and promised co-operation in minerals and energy matters between the two nations. This points to South Africa being supplied oil at preferential prices - something we might notice at the fuel pumps. In future, Venezuela could supply crude oil for South African refineries to export elsewhere in Africa, helping to reduce dependence on the volatile Middle East. ...We think it is a good idea for this country to establish links with countries like Venezuela - and others who espouse the formation of a new, strong South-South axis. For too long, the rich countries of the North have dictated the way the world works. Now, the developing world - which includes us - is demanding to share in the wealth generated by the natural resources it provides. ...
Venezuelan President Hugo Chavez is expected to sign a bilateral energy agreement with South Africa....paving the way for state-owned oil company PetroSA to acquire an oil-producing asset in Venezuela. PetroSA has held high-level discussions with its Venezuelan counterpart, PDVSA, on projects including oil exploration and the production of heavy crude oil in the Orinoco belt of Venezuela. Everton September, vice-president of PetroSA's new ventures unit, said yesterday Chavez's signature was needed to formalise a memorandum of understanding. "The MOU will come into effect immediately upon signature," he said. "PetroSA would like to acquire an oil-producing asset in Venezuela (and) receive a direct crude allocation from PDVSA in the short term, between six months and one year. "In the medium term (between one and two years), offshore natural gas opportunities, (and) opportunities that commercialise our GTL technology and LNG opportunities will be investigated." PetroSA operates one of the world's largest gas-to-liquids (GTL) refineries at Mossel Bay, on the southern coast of South Africa, and is actively pursuing oil exploration in Equatorial Guinea, Gabon and Egypt. September said no projects had been identified yet and it was premature to speculate on the size of the Venezuelan investment or proposed output volumes. He said previously that the deal with Latin America's biggest oil company may be worth hundreds of millions of dollars. September said oil from Venezuela could be earmarked for PetroSA's new R50-billion Coega refinery project, which would produce 250 000 barrels per day. The refinery, expected to come on stream by 2015, would position PetroSA to export oil throughout Southern Africa. Venezuela is South Africa's third largest trading partner within the Andean Community, with total trade between the two countries valued at R896-million last year. South Africa's imports are now dominated by petroleum oil, which accounted for 90% of total imports from Venezuela in 2007, figures from the Department of Trade and Industry show.
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