Chavez, Lula Da Silva Ratify Mighty Energy Pole to Unite PDVSA, Petrobras

"Only united we will be a great homeland," said President of the Bolivarian Republic of Venezuela Hugo Chavez during a ceremony where state-run oil companies PDVSA and Petrobras initialed an agreement on a joint venture to build the Abreu E. Lima refinery in Pernambuco, Northeast Brazil.

"The agreement entered into by PDVSA and Petrobras could lead to an alliance for oil drilling at the Orinoco oil belt and paves the way to keep on working on the Great Pipeline of the South," said the Venezuelan head of state. The idea is to establish the Caracas-Brasilia-Buenos Aires axis within the current South American geopolitical dynamics to consolidate a strengthened pole in full freedom.

Petrobras will have a 60-percent interest; the remaining 40 percent will go to PDVSA. The joint venture will operate with labor of both nations. Oil processing capacity is expected to stand at 200,000 bpd. The output will be traded in new markets in order to have multiple partners throughout the world.

"In the long term, 100 bpd of oil from the wells drilled at bloc Carabobo 1, Orinoco oil belt are to be provided. The output is estimated to start in a two-year period approximately," said People's Power Minister of Energy and Petroleum and PDVSA CEO Rafael Ramirez. To date, PDVSA and Petrobras have certified 45.5 billion barrels of onsite original oil in that bloc.

According to President Chavez, the joint venture showcases Venezuela's steady economic growth over the past few years. In this regard, he invited Brazilian businesses to invest in Venezuela in order to bolster productivity and economic diversification in agricultural industry and the petrochemical sector, among others.

"Brazilian businesspersons, you can count with all our support. Venezuelan businesspersons, I urge you to enter into agreements with this fellow nation, because it is a historical need which prompts us to move faster," said the Venezuelan ruler.

President of the Federative Republic of Brazil Luiz Inácio Lula Da Silva noted the good timing in Venezuela. "For long time, Venezuela had not witnessed what it is experiencing today, because the people are living in full democracy. Venezuelans are starting to have access to credits, which can be translated into an extraordinary novelty. Formerly, in this hemisphere, the decision was to rule only for 30 percent of the population, not for everybody," he said.

He recalled about energy-related troubles in the world and South America, and pointed to the need to estimate the oil, gas and water potential in the hemisphere in order to lay a transmission line to transfer electric power to more vulnerable nations. Venezuela-Brazil trade exchange recorded USD 4.91 billion in 2006, including USD 3.5 for Brazilian exports. From January to October 2007 this number increased to USD 3.8 billion.