Sunday, October 9, 2011

What Russia might lose by changing the regime in Venezuela

Russian-Venezuelan multibillion-dollar contracts in various fields, which actively promoted the conclusion of the current President Hugo Chavez may be in jeopardy. The health status of 57-year-old Venezuelan leader, who runs the country unchallenged for almost 13 years, has recently deteriorated. In addition, next year, Venezuela's next presidential elections are coming.
Polled by "Prime" the experts argue about the fate befall the Russian contracts for the supply of weapons, oil and gas, energy, transport and agriculture, and what to expect companies that have entered into these agreements and have already begun work in this Latin American country.


According to the Organization of civilian control over the activities of security agencies and the army of Venezuela in the last six years the country has spent on the purchase of military equipment and weapons $ 15 billion. Of this amount, 8.5 billion dollars goes to Russia.
In the course of this week's visit to Venezuela, the Russian delegation headed by Deputy Prime Minister Igor Sechin had signed an agreement granting the Bolivarian Republic of credit to four billion dollars to maintain the achieved level of military-technical cooperation with Russia. Two billion will be allocated next year, and another two billion - in 2013, Chavez said.
One of the largest joint projects in the energy sector is to develop the Junin oil fields 6 and Junin-3 in the oil belt of Venezuela's Orinoco River. The development of the Junin-6 deals with the Russian "National Oil Consortium" (NOC), which are on parity basis of JSC "Gazprom Neft", OAO "LUKOIL", OJSC "Rosneft", OJSC "Surgutneftegaz" and OJSC "TNK-BP" in conjunction with Venezuelan state company PdVSA. Junin-3 develops LUKOIL.
JSC "INTER RAO UES" plans to build a power plant on Venezuela's petroleum coke and is interested in participating in other projects. In addition, Russia plans to supply Latin American country more machinery and equipment, and in return get bananas and other agricultural products.
The thing is Chavez?
RIA Novosti interviewed experts disagreed on this point. Deputy Director of the Latin American Academy of Sciences Vladimir Sudarev notes that the situation should not be dramatized, especially in the health of Chavez. "The main problem is that the regime itself is unstable, not prepared a successor, is not entirely clear mood of Venezuelan generals and the army" - he said. However, the radical scenario like a military coup removed, since their time in Latin America has long passed, he said.
According to him, no matter how a situation, most contracts were signed with the Venezuelan state and not personally with Chavez. If you suddenly come opposition, it certainly can cancel them, but a matter of honor of any government - to pay off loans, or it may come to The Hague tribunal.
"Indeed, many prisoners with Caracas contracts were tied to Chavez, but their support and many people around him. It gives a chance to the national authorities to strike a balance between the interests of North America, which is a lot of Venezuelan oil, and other partners, including Russia "- says a leading expert at the Center politkonyunktury Dmitry Abzalov.
It should be understood that the Russian oil and gas companies are already pretty tight work in Venezuela, a major risk for them - if in the government power to take the representatives of the northern provinces, the opposition to Chavez. In this situation, many projects and programs of nationalization would be disavowed, the company can return to the previous foreign owners, so that the RF will remain with nothing, experts say.
In turn, the general director of Fund of national energy security, Konstantin Simonov confident that, "judging from experience in Libya, our contracts in Venezuela after the change of government there waiting for an unenviable fate." Chavez once expelled from the country of Western companies and never paid them any compensation, the new power they are likely to return, and also go to the Russian partners, who, as it turned out, "cooperated with a criminal regime," he said.
Weapons - no oil industry - yes
What will happen with contracts in specific areas? According to Sudareva, if the authorities in Caracas, the opposition comes, it first will turn contracts with Russia on arms deliveries. "This is a glitch and we - we offer sophisticated technology, while not its maintenance services", - he said.
However, experts advise not too upset about the cuts in military contracts with Venezuela - the sum is already approaching $ 10 billion, plus the four, which gives the Russian loan, half will go to military purposes. Thus, further arming the country does not particularly needed.
Oil and gas cooperation, is likely to continue because it is advantageous to Venezuela, and Russia does not take a lot of money and has good experience in this field. "If the authorities in Caracas, reasonable people will come, they will not shoot from the hip" - believes sir.
In general, according to Sudareva, Russia should not bet on the promotion of automobile industry in Latin America, as the market there are already densely occupied by Chinese and Korean manufacturers, and the strong industry - high technology and nuclear energy.
Abzalov of the Center for politkonyunktury agree with the idea that some contracts may be canceled. "The chance to save the position is, if active work is already underway, such as happened with a number of projects of LUKOIL in Iraq. To do this, Russia should support both the general trends on the continent, and to comply with its interest, because in some areas of Venezuela is a competitor to us "- he said.
Do we need a bank of the Caribbean?
Experts point out that the whole of Venezuela - a rather promising direction. In particular, this applies to deposits of the Orinoco basin, which has an active interest in China, recalled Abzalov. "In addition, it is not just about raw materials, but also on transport infrastructure, for example, the construction of the pipeline translatinoamerikanskogo, in which Russia would like to participate," - he added.
"The fact that we went to Venezuela, is good for us, including in terms of establishing contacts with its neighbors, this country - one of the leaders. So go out, at least, on their own, should not be" - said sir.
According Abzalova, if Russia wants to maintain its position, it should be fixed in Venezuela and develop cooperation with other countries - Brazil, Argentina and Chile. "It is important to negotiate with the Venezuelan elite and a potential successor to Chavez, and as far as I know, by the military-industrial lines, such contacts are under way. Maybe soon we will learn about the talks in this direction," - he said.
In turn, Simonov believes that Russia should not be, intoxicated with dreams of global partnership to invest tens of billions of dollars to the Bolivarian Republic. It is better to spend it on development of mineral deposits in eastern Russia. "It's funny - about a billion dollars we paid only for the right to invest in Venezuela," - he recalled.
The problem is that Russia is seeking to enter foreign markets, selects the most odious regimes partners, thus taking on the enormous political risks, he said. "Projects in Venezuela were not designed for a year or two, but for ten years, during this period with Chavez just that something might happen" - he argues. In such countries, the change of political regimes is clearly changing project participants, but we insist on attacking the same mistake, summarizes Simonov.