Steve Quayle News Alerts

Nov. 26, 2004
RIA Novosti

MOSCOW - When speaking in Moscow yesterday, Hugo Chavez said, "Russia and Venezuela are now establishing a strategic alliance whose strengthening is favored by circumstances." In this alliance, says Vremya Novostei, the Venezuelan president gives pride of place to the political aspect. "We are against a uni-polar world (which Chavez is convinced is sought by the US). There must be a strong Europe, a strong Russia, a strong Asia with China and India, and a strong Middle East and Latin America."

Russian-Venezuelan cooperation is based not only on politics, but also economics, primarily oil. Mr. Chavez suggested that OPEC's crude price band should be changed. The existing one - from 22 to 28 dollars per barrel - is a "thing of the past", according to him. The Venezuelan leader is convinced that the oil price floor must be 30 dollars per barrel, while its ceiling "should be set by the market".

It is believed that an inter-governmental agreement on Moscow-Caracas cooperation in the fuel and energy sector will be signed during Mr. Chavez's visit. Prospects for joint oil extraction in the Orinoko basin are also good. Lukoil plans to invest up to a billion dollars in oil projects in Venezuela. Russian business looks to build hydro and heat generating stations, and aluminum smelters in that country. The projects will cost another billion dollars.

Besides, Caracas has plans to buy from Moscow 40 Mi-35 fire-support helicopters and MiG-29S fighters. Venezuela would not only like to acquire Russian-made arms and military equipment, but also to have its military personnel trained in Russia. Moscow is eagerly looking forward to another step promised by Caracas: during his present visit, Mr. Chavez may describe Russia as a market economy and back its WTO entry.

According to a Russian Foreign Ministry spokesman, Mr. Chavez "has been given the red carpet treatment in Russia." He was also warmly welcomed by Russian oil men who gave astanding ovation to the Venezuelan leader as he appeared at an oil and gas workshop in Moscow and punctuated his address with applause.

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