By Simon Pirani
Gazprom, the Russian gas monopoly, last month constituted two Venezuelan subsidiaries to develop offshore gas fields together with Petroleos de Venezuela (PDVSA), the main state oil and gas company. Observers said the deal fits well with president Hugo Chavez’s plans to demonstrate his independence from the US.
The Russian company has formed a working party with PDVSA to explore and develop the Urumaco 1 and Urumaco 2 blocks, which have probable natural gas reserves of 100 billion cubic metres.
After visiting Caracas, Stanislav Tsygankov, head of international operations at Gazprom, said he had “discussed cooperation on gas projects” with energy ministry and PDVSA officials. The two sides had “approved the work done so far [by Gazprom] on the Venezuelan shelf”.
Tsygankov also talked to officials in Caracas about possible Russian participation in the $25 billion Venezuela-Brazil-Argentina gas pipeline project, Gazprom announced. Gazprom also agreed to share expertise and study other avenues of cooperation with Brazil’s largest oil and gas producer, Petrobras.
Political sense
Analysts say that, while it is uncertain whether the pipeline will ever be built, the Russian connection makes political sense for President Chavez.
Clifford Kupchan, a former US State Department official and director of Eurasia Group consultancy, said: “From Chavez’s side, this is probably political. He is looking to Iran, to Russia, and elsewhere. The Russians don’t want to ruin their relations with the US, though: for them, it’s business. They are looking for overseas investments.”
Professor Jonathan Stern, Director of the Oxford Institute of Energy Studies, said: “President Chavez’s agenda is all about demonstrating independence from the US and US oil companies, and this fits into that very well. Time will tell how significant it will be for the gas industry.”
Lukoil, Russia’s largest oil company, has also started work in Venezuela. A three-year deal signed with PDVSA provides for geological research on reserves in the Junin 3 block, a 640 square mile property in the Orinoco oil belt in Anzoategui state. The Russian state oil company Zarubezhneft has been in talks with PDVSA and Suelopetrol, a small Venezuelan oil company.