Venezuela comes closer
[b]10,000km separate Minsk and Caracas, taking 16 hours by plane and one refuelling stop. However, in recent times, Venezuela has become much closer to Belarus. This former ‘terra incognita’ has transformed into a huge construction site, where Belarusians drill wells, construct agro-towns and accommodation, lay gas pipelines and build new plants [/b]
In late November, Minsk’s Victoria Hotel hosted the 1st ‘Venezuela-Belarus: Achievements and Prospects of Bilateral Relations’ Forum, reflecting the scale of our bilateral liaisons and outlining new areas for collaboration. Just five years ago, Belarusian-Venezuelan turnover totalled $5m but, by late 2011, this may have reached $2bn (matching that of Belarus’ largest trading partners in Europe).
“Friendship and mutual understanding between our presidents has resulted in a true miracle: a breath-taking development of bilateral relations over less than five years,” stressed the Ambassador Extraordinary and Plenipotentiary of the Bolivarian Republic of Venezuela to Minsk, Americo Diaz Nunes, at the Forum. He believes that the complementarity of our two economies is a key factor.
Despite its natural wealth, Venezuela (ranked first globally for oil deposits) can hardly be called a rich state. It faces many challenges: construction of accommodation, opening of new production facilities and creation of new jobs. “Venezuela is striving to establish strategic alliances with friendly countries, interacting via fair exchange of experience and technologies and establishment of modern technoparks,” the Ambassador noted.
In this respect, Belarus is an ideal partner, boasting well-developed industrial and scientific potential. Venezuela is presenting new opportunities to the Belarusian economy. In the past, oil contracts with Caracas have eased Minsk’s access (following a dramatic rise in Russian prices). Belarus has pioneered the Eastern-European region in terms of mastering alternative routes of supply and continues to develop its hydrocarbon co-operations.
The Venezuelan President is currently fighting cancer, under the eye of national and foreign observers. However, Mr. Chavez’s medical problems have not affected Belarusian-Venezuelan relations. In early October, Viktor Sheiman, the Aide to the President of Belarus on Special Matters, travelled to Venezuela to meet its President. Overseeing our Latin-American policy, he signed agreements to continue our oil co-operation, which is certainly at the heart of our bilateral economic relations.
Last year, Petrolera BeloVenezolana, JV extracted 740,000 tonnes of oil; by the end of this year, 1.1 million tonnes are expected. In 2012, the figure is forecast to be 1.5 million — reaching the amount extracted domestically in Belarus. “We have consent to develop a large oil-rich region, jointly with Venezuela and China. Hundreds of thousands of barrels are to be extracted daily,” Mr. Sheiman reports, adding that oil extraction should rise several fold once the new region is mastered.
The First Deputy Prime Minister of Belarus, Vladimir Semashko, also spoke of the project at the Forum. The Junin-1 deposit is among the largest in Venezuela and, as Belarusian specialists confirm, could yield up to 10 million tonnes of ‘black gold’. Extra-heavy oil is also deposited there, which requires refinement; a plant needs to be built at a cost of over $10bn. Of course, a third party will be needed to help fund this. “If we establish a consortium of three companies — Belarusian, Venezuelan and probably Chinese — and find a source of financing, this project can be realised,” Mr. Semashko explains. He believes it will gain momentum in a year or two, if oil prices continue growing.
At present, the construction branch is to the fore. On November 21st, Mr. Lukashenko met the Chairman of the State Control Committee, Alexander Yakobson, who reported on the state of the construction complex. This year, domestic financing was cut but the President has ordered that more construction services be offered abroad to generate revenue (to help fund the building of homes in Belarus).
With this in mind, Belarus plans to expand its participation in building accommodation in Venezuela. This year alone, 2,500 flats have been built in the city of Maracay and, recently, a pilot Belarusian agro-town was presented in Venezuelan Guбrico. A $315m project (with Venezuelan investments) is being realised, with plans to construct a milk and meat farm, a large poultry farm, a dairy plant and a meat factory.
“Works are on schedule and, in 2012, the first production facilities are to be launched,” the Deputy Agriculture and Food Minister, Leonid Marinich, told the Forum. “It’s planned that, next year, 1,500 hectares are to be cultivated, yielding a good return. If everything goes well, Belarus could build another five agro-towns in Venezuela.”
Following Venezuela’s request, our country is to construct 50-70 houses for workers. The Venezuelans are already drawing up lists of those wishing to become the first residents. As Mr. Semashko tells us, Belarus is realising a large scale programme on accommodation construction in Latin America, with 20,000 flats planned. In fact, construction is a complex branch, reaching far beyond bricks and cement. Prospects for co-operation are much wider, as Belarus’ Deputy Trade Minister, Edvard Matulis, notes, “The supply of Belarusian furniture for ‘social’ housing in Venezuela is currently being studied, with our largest factories expected to participate: Pinskdrev and Gomeldrev. We hope our Venezuelan friends will love Belarusian furniture.”
Additionally, Belarusian specialists are laying gas pipelines to Caracas flats, with some already operational. 90 percent of Venezuela’s budget comes from oil exports. Accordingly, it prefers to use natural gas domestically. Belarus has suggested laying gas pipelines in Venezuela and Caracas to support the idea — including financially. Meanwhile, we are helping realise a project to change local vehicles over to liquefied gas (using equipment from Novogrudok plant). Thousands of sets have been supplied, with the establishment of a joint venture discussed.
Venezuela’s rich natural deposits extend beyond hydrocarbons. Its Pequiven petrochemical company is liaising with Belarus’ Belgorkhimprom Design Institute to mine phosphate worth $5bn ($3.5bn has already been extracted). This shows the scale of our bilateral liaisons.
By late 2011, Belarus plans to have launched several new facilities in Venezuela. Their successful operation will herald a new stage in bilateral relations, while allowing Venezuela to develop its industry — sadly neglected over the past few decades. In recent years, the country has relied on selling oil abroad, while buying imported goods. Meanwhile, unemployment has been a problem. The advantages to Belarus are evident: we are exporting our technologies and products, while mastering new markets.
By late 2011, a new plant manufacturing 5,000 MAZ vehicles annually will have been set up; their assembly should start in early January. “We’ve agreed to maximise local production within five years, acting stage by stage,” explains Mr. Semashko. “This project is a true advantage for MAZ, since the plant should increase its production volumes.”
Soon, an assembly facility for Belarusian tractors is to be built in Venezuela, able to produce 10,000 vehicles annually. Moreover, a Belarusian ceramic plant is also to be launched, making 100 million tonnes of bricks each year — reaching full capacity by June 2012.
“A contract has been signed and we’ve actually started the construction of a plant to produce communal and road machinery in Venezuela,” Mr. Semashko tells us. “It’ll manufacture loaders, road-construction machinery and other vehicles — overseen by famous Belarusian Amkodor.”
Venezuela also needs a 800MW TPP, as its large oil processing plant and neighbouring smaller industrial facilities require energy supply. Truly, Belarusian builders are going to be busy on the other side of the Atlantic. Huge prospects are opening up for Belarusian-Venezuelan co-operation.
The National Assembly — Venezuela’s Parliament — features busts of Venezuelans and foreigners of whom the country is proud. Among them are not only political figures and military leaders, but musicians and scientists. On visiting the country, I thoroughly inspected the hall, with the hope of finding Venezuelan ‘Ignat Dameiko’ (a Belarus-born geologist and ethnographer who became a national hero in Chile). Sadly, I failed to find him. Those now building houses in Venezuela may one day find themselves given the honour however.
By Igor Kolchenko
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