THE WALL STREET JOURNAL: Venezuela, Brazil Sign Energy, Economic Accords: “… the Mariscal Sucre project is on hold while Venezuelan President Hugo Chávez negotiates with Mitsubishi and Shell over the natural-gas venture. Mr. Chávez insists that Venezuela have majority control of the project, among other things, and Shell executives were said to be unwilling to concede a number of points in the negotiations.” (ShellNews.net) 15 Feb 05
A WALL STREET JOURNAL NEWS ROUNDUP
February 15, 2005; Page A16
CARACAS, Venezuela -- The governments of Venezuela and Brazil signed an agreement to jointly develop the offshore natural-gas project Mariscal Sucre, along with a series of bilateral trade deals, in an effort to establish a strategic and economic alliance between the nations.
Venezuela is the world's fifth-largest oil-exporting country. Its state oil company, Petroleos de Venezuela, will develop the $2.7 billion gas project with Brazil's Petroleo Brasilero, or Petrobras, according to a memorandum of understanding signed by both nations.
Royal Dutch/Shell Group and Japan's Mitsubishi Corp. have been in discussions with Venezuela about developing the project, but the parties haven't been able to come to an agreement. A Shell spokesman said his company is still looking to develop the field.
At the moment, the Mariscal Sucre project is on hold while Venezuelan President Hugo Chávez negotiates with Mitsubishi and Shell over the natural-gas venture. Mr. Chávez insists that Venezuela have majority control of the project, among other things, and Shell executives were said to be unwilling to concede a number of points in the negotiations.
Luis Prado, Shell's vice president for external affairs in Caracas, yesterday said the oil company is still very much part of the Mariscal Sucre project, despite the Petrobras news. Petrobras's participation is a new development that Shell officials knew nothing about, he said. He made clear, however, that the Venezuelan government is free to bring new partners into the venture and that Shell still remains interested in developing Mariscal Sucre.
Mr. Chávez and Brazilian President Luiz Inácio Lula da Silva signed the memorandum of understanding during Mr. da Silva's two-day visit to the Andean nation. The two leaders signed 25 accords dealing with energy and economic cooperation.
Mr. da Silva said the meeting was "a special moment in which the two countries are establishing a true strategic alliance." Mr. Chávez, an advocate of Latin American integration to strengthen the region's hand in negotiations with the U.S. and other powerful nations, said Venezuela would prefer trade deals with South American nations rather than the U.S., even if it means lower profits for his country.
Other pacts included deals to cooperate on agricultural and scientific development; increase commercial trade; and build bridges and highways connecting the countries.