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Energy Cooperation Drives a Murky Venezuela-Iran Relationship

During the course of May 2010, Iran and Venezuela continued to pursue agreements in the areas of security, business, housing, and so-called "non-aligned country" diplomacy. Energy, however, remains the mutual interest that most closely binds these two otherwise disparate cultures.

On 7 May 2010, Iranian oil and gas developer Petropars announced that Iran and Venezuela will construct an oil refinery in Syria. On the back of a September 2009 series of memorandums of understanding, signed between Venezuelan president Hugo Chavez and Iranian president Mahmoud Ahmadinejad, Venezuelan energy giant Petroleos de Venezuela SA (PDVSA) joined with Iran's Petropars to establish a joint venture, VENIROGC, which will undertake joint projects in third countries. The Syrian refinery will be the company’s first cooperative project. VENIROGC directors are also studying the feasibility of constructing crude oil storage facilities in China and Africa.

Not two weeks later, Venezuela's foreign minister, Nicolas Maduro met with Ahmadinejad in Tehran on May 18 to formalize a list of agreements. Energy, again, was at the top of the list. Iran's president highlighted the two country's energy agreements by stating that he will "make available [to Venezuela] all Iran's knowledge in the energy field."

Meanwhile, the end of 2009 solidified agreements where by the two countries would form a separate joint-venture based in Span, Beniroug, which would divert energy investments to Cuba, Sudan, China, and Bolivia. Iran has also agreed to build PDVSA four oil tankers, to be constructed in Bushehr, Iran at a cost of US$354 million a tanker.

Tehran continues to import gasoline from Caracas, and the two countries have pledged to invest US$760 million in each country's energy sectors. PDVSA continues to stand by an earlier promise to finance ten percent of the required funds according to a development plan established for Iran's South Pars gas field's phase 12. Tehran also pledged to invest the same amount of capital in the development of Venezuela's Dobokubi and 7th Ayakochou oil fields.

Energy agreements could have opened the door for other less savory activity in Venezuela, as the Department of State underlined in the May 11 release of its state sponsors of terrorism blacklist, which again included Venezuela. Colombian authorities have also disclosed reason to believe that the Revolutionary Armed Forces of Colombia (FARC) have trained groups of Iranians inside Venezuela. A Spanish journalist who will soon publish a book about his six years as an undercover Islamic radical operating in Spain and "terrorist camps" located outside of Caracas appears to support the idea that Venezuelan-Iranian ties, while driven by mutual interest in energy, do not stop at oil and gas.

By Southern Pulse


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