Wednesday, April 25, 2012

Venezuela's opposition candidate would review every oil deal

Venezuela's opposition candidate would review every oil deal
24 Apr 2012, 10.39 pm GMT

Caracas, 24 April (Argus) — All of the international energy agreements
signed during the 14-year rule of Venezuela's President Hugo Chavez will
be reviewed in 2013 if opposition candidate Henrique Capriles Radonski
wins the 7 October presidential elections.

Some of the agreements that would be reviewed include the PetroCaribe
oil supply initiative created in 2005, and the Venezuela-Cuba energy
pact signed in 2000, according to Ramon Guillermo Aveledo, a senior
adviser to opposition candidate Capriles Radonsky who is running against

Venezuela's cash-for-oil loan deals with the China Development Bank,
state-owned oil firm PdV's offshore capital expenditures commitments in
other countries including Cuba and Vietnam and all of the joint ventures
PdV has signed in Venezuela since 2010 also will be reviewed, according
to Aveledo.

If Capriles Radonsky is elected president, he will not automatically
suspend any of the energy agreements that the Venezuelan state and PdV
have signed since 1999 with foreign governments, lenders and companies,
Aveledo said. But Venezuela's Constitution requires that all
international treaties, agreements and foreign contracts with
state-owned enterprises like PdV must be reviewed, debated and approved
by the National Assembly. None of the energy agreements signed during
Chavez's years in power were submitted to the assembly for approval,
Aveledo said.

Agreements like PetroCaribe will be reviewed "frankly and jointly" with
the beneficiary countries, Aveledo said. Venezuela "has commitments that
it cannot withdraw from irresponsibly, but at the same time one cannot
give what is beyond one's capacity to give," he added.

Some international energy agreements also could be suspended or modified
in line with Venezuela's strategic interests, Aveledo said, without
giving any details. But foreign oil companies, like China's CNPC and
Spain's Repsol, which are currently developing upstream and downstream
JVs in Venezuela, would certainly be welcome to continue expanding
operations under a Capriles Radonsky government.

Aveledo said foreign firms like CNPC should welcome the reviews of their
agreements with PdV, because the end result would be stronger and more
transparent deals.

But he was less certain about the future of the Chavez government's
cash-for-oil loan agreements, which currently total an outstanding $32bn
and are being repaid by PdV at a rate of 430,000 b/d of crude and
refined products.

"We don't have the information that we need to decide whether or not
these agreements with China are convenient," Aveledo said.

A Capriles Radonsky government would not necessarily sever energy ties
with Cuba, but Aveledo said the bilateral relationship requires major
changes. Over 60,000 Cuban nationals currently are in Venezuela on
official missions the Chavez government pays for with oil shipments to
its island neighbor. Many Cubans are posted inside the armed forces,
intelligence services, national mercantile and civil registries, and the
tax, passport and identification entities. Cubans in sensitive positions
in Venezuela's government – including PdV – would be removed.

If Capriles Radonsky were elected, his administration also would seek to
maintain good Opec-based relations with Iran, but would reject Iranian
anti-Semitism and would support UN resolutions on Iran's nuclear
development program, Aveledo said.

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