Venezuela's Hugo Chavez has just completed a tour of Latin American countries with similar ideas about wielding oil and gas as weapons in the fight against US-led corporate "neoliberal globalization." Always keen to exploit anti-US sentiment in the region, Chavez is enlisting the trustworthy help of Bolivia and Argentina--which last fell under the sway of the IMF after the peso crisis at the turn of the new millennium. As always, he aims to build a regional counterweight to US influence in the region through the so-called Bolivarian revolution. To no one's surprise, ti will be fueled by oil and gas revenues that Latin states are able to earn in the absence of the dreaded Western oil companies that have been kicked out or have been given much-reduced roles by Hugo Chavez and Bolivia's Evo Morales. Viva la revolucion!? From the Associated Press:Reuters has more details on the Venezuela-Bolivia deal setting up a jointly-run corporation:Venezuelan President Hugo Chavez moved to strengthen energy ties with oil- and gas-rich allies Bolivia and Ecuador and key energy consumer Argentina on Friday, while decrying the long-term failure of private investment in Latin America.
The leftist leaders of Venezuela, Bolivia and Argentina came together in southern Bolivia the day after Chavez offered to help Ecuador build a $5 billion oil refinery.
Chavez is on a four-country regional tour, seeking to expand his nation's influence by leveraging its vast oil reserves and create a "grand South American alliance" to counter U.S. influence.
Throughout the tour, Chavez has stressed a South American energy integration driven by public instead of private investment.
"The story of neoliberal globalization was that privatization was going to bring us big investment. That was a lie," Chavez said at Friday's three-nation summit in Bolivia. "The delivery of our natural resources to transnational companies ... left us only underdevelopment, technological backwardness, poverty, misery and dependence."
Morales picked up where Chavez left off, saying that if transnational companies now in Bolivia failed to invest in their natural gas concessions "within a certain period of time ... we will take back those fields where they are located without fear."
Argentine President Nestor Kirchner said Morales need only "pick up the telephone" and Argentina would provide the necessary capital to fill in where foreign investment fell short.
Morales and Kirchner on Friday finalized a $450 million deal to build a gas separation plant near in southern Bolivia near the Argentine border.
Together with a gas pipeline already in the works, the plant will help Bolivia sell its neighbor some $16 billion worth of natural gas to Argentina over the next 20 years, according to a deal the two countries signed last year.
On Tuesday in Buenos Aires, Chavez and Kirchner signed an "treaty on energy security" and proposed building a regasification plant which would allow Argentina to received shiploads of liquefied natural gas from Venezuela.
Chavez also announced plans to buy up to $1 billion in Argentine bonds.
In Uruguay last week, Chavez discussed ways to expand the country's lone oil refinery and guarantee its access to Venezuelan oil and gas.
Late Thursday night in Bolivia, Chavez and Morales signed a deal for a $600 million investment in oil and natural gas exploration in a joint venture between their state energy companies.
Morales and Chavez also signed a $70 million deal to build a hydroelectric plant in Bolivia's central region of Andean foothills known as the Chapare.
Chavez and Ecuadorean President Rafael Correa have signed an agreement to begin technical studies on the refinery in Ecuador, which would process 300,000 barrels of oil a day. The agreement contemplates the possibility of adding a petrochemical plant at an estimated cost of $10 billion.
The leaders did not say how much each country would contribute to the project, noting that it would depend on the feasibility studies. They said construction of the refinery, to be located in the Pacific port of Manta, would begin next year and take four to five years to finish.
Argentina and Venezuela pledged new oil and natural gas investments on Friday in their neighbor and leftist ally Bolivia, which is seeking new investors after nationalizing its energy sector last year.Leaders from the three countries met in Tarija, Bolivia's natural gas capital, where President Nestor Kirchner said Argentina would give Bolivia soft loans for a $450 million processing plant to ship more natural gas to Argentina.
Bolivia and Venezuela launched an ambitious energy alliance earlier in the day, announcing $600 million in oil exploration by a new binational company, YPFB-Petroandina.
In Tarija, President Evo Morales said, as he has before, that companies that do not meet investment commitments will be thrown out of Bolivia, and Kirchner said Argentina would step in.
"My dear Evo, my telephone is waiting for your call. If these businessmen don't invest, just pick up the phone and we Argentines are going to come invest with you," Kirchner said.
Morales nationalized Bolivia's energy industry in May 2006, hugely increasing the government portion of profit from foreign oil companies such as Brazil's Petrobras and Spain's Repsol-YPF.
Venezuelan President Hugo Chavez, who this week toured the region promising new energy investments in Argentina, Uruguay and Ecuador as well as Bolivia, has used wealth from his country's oil exports to extend his regional influence.
His new joint venture with Morales -- 60 percent Bolivian and 40 percent Venezuelan -- will explore in the unexplored Amazon region north of La Paz and in blocks in Chaco, in southeastern Bolivia.
Chavez also pledged financial backing for Bolivia to start developing a petrochemical industry.
Argentina, meanwhile, will give Bolivia a 20-year, 1.5 percent loan to finance a gas separation plant billed as becoming the biggest in South America, with capacity to process 30 million cubic meters of gas a day, Kirchner said.
Kirchner previously pledged to invest another $1.5 billion in a pipeline to be ready within three years to increase Argentine natural gas imports from Bolivia to 20 million cubic meters a day, almost three times current levels.
Critics say Kirchner's price controls on natural gas produced at home have dampened investment in Argentina's own energy industry and question his plans to bring increase shipments of more expensive fuel from Bolivia.
Morales and Chavez also announced a joint $70 million investment in a thermoelectric plant for the Chapare region. Bolivia will put in 60 percent and Venezuela will add the rest.
