| RECIFE, Brazil, March 27
RECIFE, Brazil, March 27 The presidents of
Venezuela and Brazil pledged on Thursday to accelerate energy
integration between the two countries in an effort to heighten
the region's autonomy.
Although energy integration in Latin America is not a new
movement and some feel it can help limit regional energy
crises, closer energy interdependence between Brazil, Bolivia,
Argentina and Chile over the last decade has worsened the
region's current energy crisis.
Brazil's President Luiz Inacio Lula da Silva and his
Venezuelan counterpart, Hugo Chavez, want to advance talks on
building a joint gas pipeline from Venezuela to Argentina by
June. Venezuela has Latin America's largest gas reserves.
Analysts say the task of laying pipeline across the heart
of Amazon region, over thousands of miles of Brazil's interior
and possibly other countries will face serious logistic and
They also want to seal a joint-venture in the Carabobo
heavy crude oil field in Venezuela's Orinoco belt, Lula said.
Both leaders said they were making history by joining
countries that ignored each other for decades and depended on
the United States and Europe.
"We are creating a South American country," Lula said
during a joint news conference in Recife.
It is still unclear what stake Brazil's state oil giant
Petrobras (PETR4.SA) was looking to take in the project.
"We showed our political will and now the representatives
from (Brazil's) Petrobras and (Venezuela's) PDVSA will discuss
what is possible technically," Lula said.
Petrobras said late on Wednesday that it wanted only a 10
percent stake in the project. Petrobras officials had
previously said that high costs of developing the heavy crude
field were the biggest concern in taking a larger stake.
While Chavez frequently intervenes in PDVSA decisions,
Petrobras, although it is also a state-run company, is less at
the whim of the government and managed more as a corporation,
Both companies failed to agree on a joint $4 billion oil
refinery in Recife for several years. On Wednesday, they signed
an agreement under which PDVSA would take a 40 percent stake
and Petrobras the remaining interest.
Lula thanked Chavez for making both companies think not
only of profits but also of their social and economic
Both leaders said their integration would help reduce
dependence on foreign firms.
"Over 100 years all the oil went north. Never a Venezuelan
oil tanker went south," said Chavez.
Brazil, Bolivia, Argentina and Chile had integrated their
electric energy and natural gas supplies since the 1990s, but
unorthodox policy in Argentina and Bolivia's nationalization of
gas reserves has deepened an energy crisis in the region.
Argentina has cut off around 6,000 megawatts of power going
to Brazil and ended natural gas supplies to Chile because of
its own energy rationing problems caused by government energy
policies that have turned off foreign investment.
This has pushed Brazil closer to energy rationing and sent
Chile scrambling for new natural gas supplies.
Meanwhile, Bolivia lacks the foreign investment in new gas
exploration after its nationalization of the sector to meet its
gas supply contracts with Brazil and Argentina.
Now both countries are likely to import liquefied natural
gas from the Middle East or some other supplier outside Latin
(Reporting by Mair Pena Neto, writing by Raymond Colitt;
editing by Reese Ewing and Marguerita Choy)