World

Venezuela and S Africa sign oil deal

by rahul | September 2, 2008 at 05:37 pm

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As eagerly expected in South Africa, Venezuelan President Hugo Chavez offered PetroSA the chance to participate in the exploitation of heavy oil at the Orinoco basin. In addition, Venezuela would provide crude at preferential rates. Both countries also agreed to stand closer at South-South issues. As it centers on oil cooperation, this agreement heralds a less romantic approach of the negritude used in other countries of Africa by the Chavez administration. Only time would tell if local bureaucracies allow the prompt application of this energy agreement.

Venezuela and South Africa have signed an agreement to strengthen cooperation between their oil and gas industries.

Reports said the deal likely included plans for oil-rich Venezuela to supply crude to South African oil firm Petro SA at preferential rates. The deal is particularly important for South Africa, which has been plagued by energy shortages. Venezuelan President Hugo Chavez signed the agreement while on a state visit to South Africa.
Mr Chavez said the deal was an example of southern nations cooperating in a new strategic alliance.
"It will be a wonderful day, the day when the first Venezuelan tanker will stop by to leave oil for South Africa, " Mr Chavez said. He also encouraged Petro SA to explore oil resources in Venezuela.
Empowerment
South Africa's President Thabo Mbeki said agreement would "further empowerment of the countries of the south" although he declined to say if South Africa would be getting preferential rates for oil from Venezuela.
"The object is to assist in reducing the costs of energy," he said. In January, electricity shortages forced South Africa's gold and platinum mines to shut for five days.

At a news conference after the signing of agreements, Chavez said Venezuela was interested in using SA’s oil storage capacity of some 45-million barrels and helping expand its refining capacity. With the world in crisis, Chavez said it was imperative that southern nations unite behind a “new strategic agenda, to conduct a true strategic change in international relations."SA’s President Thabo Mbeki said several agreements signed today contribute to “the further empowerment of the countries of the south."