Wednesday, September 03, 2008

Venezuela and South Africa Sign Economic Cooperation Deal

Venezuela and S Africa sign deal

Venezuela and South Africa have signed an agreement to strengthen cooperation between their oil and gas industries.

Reports said the deal likely included plans for oil-rich Venezuela to supply crude to South African oil firm Petro SA at preferential rates.

The deal is particularly important for South Africa, which has been plagued by energy shortages.

Venezuelan President Hugo Chavez signed the agreement while on a state visit to South Africa.

Mr Chavez said the deal was an example of southern nations cooperating in a new strategic alliance.

"It will be a wonderful day, the day when the first Venezuelan tanker will stop by to leave oil for South Africa, " Mr Chavez said.

He also encouraged Petro SA to explore oil resources in Venezuela.


South Africa's President Thabo Mbeki said agreement would "further empowerment of the countries of the south" although he declined to say if South Africa would be getting preferential rates for oil from Venezuela.

"The object is to assist in reducing the costs of energy," he said.

In January, electricity shortages forced South Africa's gold and platinum mines to shut for five days.

Story from BBC NEWS:
Published: 2008/09/02 14:39:52 GMT

Chávez invites SA to exploit his oil reserves

PRETORIA, SOUTH AFRICA Sep 02 2008 17:13

It is high time that Venezuela starts sending oil to South Africa and that south-south cooperation is enhanced, President Hugo Chávez said in Pretoria on Tuesday.

"It is justice ... it will be a wonderful day when the first Venezuelan tanker stops by to leave oil for South Africa," he said.

Chávez -- the first Venezuelan president to pay a state visit to South Africa -- was briefing the media following the signing of a number of memorandums of understanding, including one on energy cooperation.

As part of the agreement, South Africa's PetroSA would also gain access to Venezuela's oil reserves.

"PetroSA should immediately go to Venezuela to start working with us to exploit our oil reserves," he said.

Venezuela has one of the world's largest oil reserves and developing commercial relations in this sector could provide alternative sources of energy to South Africa, he said.

Chávez said the world was facing a terrible and systemic crisis with rising food, fuel and electricity prices among others and a new strategic agenda needed to be devised.

"We cannot wait a second more ... only united will we be free and only [if] free can we develop fully.

"Today our north is the south," he said, referring to Venezuela's previous practice of supplying oil to the north and not to developing countries.

President Thabo Mbeki said the strategic partnership would allow the countries to learn from and draw on each other's strengths and experiences.

"It is critically important that as we build this partnership we do so in the context of developing our south-south relationship," he said.

Cost and price structures were yet to be developed. However, Mbeki said the purpose of the agreement was to cut out the intermediaries and have a direct state-to-state relationship.

"The objective is indeed to assist in the process of reducing the cost of energy," he said.

A number of other agreements between the two countries were also on the cards and these included economic, telecommunications and broadcasting, and arts and culture cooperation.

Chávez said he was fully aware that global oil reserves would run out and it was even more important to find alternative energy sources for the "post-oil world".

While this had not been raised during the bilateral discussions, Chávez said it may well be introduced into the agenda.

Earlier, Chávez was honoured on his first state visit with a 21-canon salute followed by the playing of his country's national anthem by the national ceremonial guard band.

Flowers floated in the Union Building's ponds and brightly coloured pot plants decorated the sides of the red carpet which snaked its way up and down the steps of the country's official seat of government.

Chávez and Mbeki, flanked by a delegation of ministers from their respective countries, appeared comfortable and at ease with each other as their laughter filled the otherwise silent, latter part of the ceremony.

Chávez is expected to depart from South Africa on Wednesday. – Sapa

Source: Mail & Guardian Online
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