Venezuela Ramps Up Strengthening of Energy Alliances

By Misión Verdad – Nov 7, 2024

Since Donald Trump’s victory in the US presidential elections, the “maximum pressure” strategy against Venezuela has potentially returned to the table. During his campaign, the now-president elect made aggressive statements about Venezuela, primarily focused on the immigration issue. It is well known that some members of Trump’s political circle, such as Marco Rubio and Rick Scott, are part of the “hardline” faction that promote forceful actions against President Nicolás Maduro’s government.

Once the victory of the Republican candidate became evident, the Venezuelan president declared that he was in favour of a “new beginning” in the relationship between Venezuela and the United States “so that we bet on a win-win situation, and the United States and Venezuela both do well.”

President Maduro has previously proposed “the reconstruction of Latin American and Caribbean integration, strengthening the BRICS, and promoting strategic alliances with emerging economies to contribute to the birth of a multipolar and polycentric world,” which can be understood as a way of anticipating a possible new period of tension with the United States, yet to be defined.

This is one of the primary objectives aimed at accelerating “the transformation process that Venezuela needs to undergo in order to become a powerful country,” said the president before the National Assembly during the presentation of his Report and Accounts in January.

Intense diplomatic agenda with a focus on energy
After the BRICS Summit in Kazan, Russia, President Maduro visited Algeria, one of the OPEC partners with which Venezuela maintains close energy cooperation and with which, in 2023, it signed 12 agreements in the fields of air transport, energy, and agriculture.

This contact was expanded when Vice President and Oil Minister Delcy Rodríguez visited the Algerian capital on November 1 to review the bilateral agenda in the oil sector with Algeria’s Minister of Energy, Mohamed Arkas.

They addressed topics related to OPEC and the Gas Exporting Countries Forum (GECF), instances where both countries have high levels of prominence due to the reserves they possess.

Rodríguez visited India prior to Algeria, on October 24, where she met with her Indian counterpart, Jagdeep Dhankhar. During the meeting, they reviewed the progress of the projects of the Indian conglomerate in Venezuela, Reliance Industries, as well as the new projects that are in the making.

She spoke with Indian Minister of Petroleum Hardeep Singh Puri to assess new initiatives in crude oil exploration and production. Energy trade between the two countries was previously affected by the US-imposed sanctions. However, in July, Washington authorized Reliance to import crude oil from Venezuela. On his X account, Singh Puri highlighted the meeting and reported that Indian companies have invested nearly a billion dollars within Venezuela.

According to the data intelligence firm Kpler, Reliance Industries accounted for around 90% of India’s crude oil imports from Venezuela after the United States approved new licenses in 2023. These transactions are expected to be influenced by the progress of the BRICS towards dedollarization.

Vice President Rodríguez also visited the Socialist Republic of Vietnam, a country with whose representative President Maduro held meetings in Kazan. In a meeting with Prime Minister Pham Minh Chinh in Hanoi, Vice President Rodríguez reviewed the cooperation agenda for the recovery process of Venezuelan industries.

The close cooperation with Vietnam serves, according to Rodríguez, “to boost bilateral trade, the relationship in agriculture, and above all, to resume energy cooperation so that Vietnamese companies in Venezuela produce crude oil that feeds our relationship in various areas.”

Earlier this week, President Maduro met with the president of Türkiye Petrolleri Anonim Ortakligi (TPAO), Türkiye’s state-owned oil company, to discuss opportunities for cooperation between the two countries in the field of oil and gas. Türkiye has geostrategic and energy importance because it is a key point for several corridors that transport oil and natural gas from the Caucasus, the Caspian Sea, and from Western Asia to Europe.

In this regard, President Maduro last reported on Monday, November 4, that Venezuela is developing its “Bolivarian diplomacy with a new plan: the BRICS route.”

Russia’s Deputy Prime Minister Meets President Maduro in Caracas, 17 Agreements Signed

Number 1 goal: sustaining recovery
On October 6, Vice President Rodríguez chaired the Russia-Venezuela Business Council and reported that 89% of the products exported by Venezuela to Russia are non-oil.

She highlighted Venezuela’s potential and specified that within the country’s territory, “the jurisdiction of other countries does not apply, only the Venezuelan legal framework.” She also referred to the promotion of Special Economic Zones.

On November 7, in the context of the 18th Meeting of the Venezuela-Russia High-Level Intergovernmental Commission (HLIC), Russian Deputy Prime Minister Dmitry Chernyshenko stated that Venezuela “remains a strategic partner of Russia in Latin America and the world.” Alongside the president of Petróleos de Venezuela (PDVSA), Héctor Obregón, the high-ranking Russian official signed “three important agreements with prominent Russian companies to strengthen oil exploration, the comprehensive security of Venezuela’s energy sector, and the implementation of new technologies in the enhanced recovery of extra-heavy crude oil.” This was reported by the president of the Venezuelan state-owned oil company.

The Venezuelan interest, facing a scenario of intensified sanctions, is to maintain the pace of the oil industry’s recovery. The Central Bank of Venezuela (BCV) reported that the Gross Domestic Product (GDP) increased by 8.78% in the second quarter of 2024, while the United Nations Development Programme (UNDP) report on Venezuela’s macroeconomic performance in the same period highlights a GDP growth projection of 6.1% for the end of the year.

However, Vice President Delcy Rodríguez has stated that this indicator will reach 9% by the end of the year, four points higher than the International Monetary Fund’s estimates.

The same UNDP report highlights that the average oil production in the second quarter reached 903,000 barrels per day, an increase of 11.8% compared to the same period last year. Additionally, the price of Merey crude averaged $71.6 per barrel, representing a 21.9% increase compared to last year.

This translates to a projected growth of 5.8% in exports at constant prices, considering that in October, the exports of PDVSA and its joint ventures reached a four-year high.

President Maduro has insisted that the world needs Venezuela for maintaining the energy equilibrium, highlighting that “the only ones who provide security for investments and energy production, oil, and gas in this part of the planet are us, and the world’s investors already know this.”

He has also mentioned the importance of joining forces with developing countries and seeking alternative economic and financial solutions, specifically in the face of complex challenges such as climate change, poverty, and inequality.

Amid the coercive blockade and onslaught by the United States and its allies, the Venezuelan response has been to diversify international strategic partnerships in pursuit of multipolarity as the essence of Bolivarian diplomacy, which has translated into the strengthening of investments from allies and partners of the Global South and the BRICS bloc in Venezuela.

The strengthening of these ties has been under the scrutiny of the United States, which has attempted to weaken them through the use of unilateral coercive measures.

Therefore, following the BRICS summit, Venezuela has intensified contact building in favor of creating and continuing feasible initiatives based on the experience of emerging countries that have recovered from aggressions by the US and Europe, such as Vietnam, Algeria, and Iran, or others that have strengthened their economic, energy, and industrial capacity, like India and Türkiye.

The Venezuelan president has stated, in reference to the US elections, that “whoever wins, what is good for Venezuela and Latin America is to have our own path, not depend on anyone, and guarantee the development of our countries.” This objective encompasses the Venezuelan government’s efforts to strengthen energy ties, which remain the country’s fundamental economic activity.

It is expected that consumers like India and China will expand their oil and gas purchasing capabilities, which implies opportunities for Venezuelan energy exports. Similarly, other key partners have contributed alternative technologies that have helped in the recovery of the Venezuelan oil industry.

Accelerating the march towards consolidating Venezuela’s role in the global energy market, within the orbit of the BRICS, has been an objective set by the Venezuelan government, and instances like the Russia-Venezuela HLIC meeting help in connecting the efforts with the multipolar bloc to respond to a potential intensification of illegal US sanctions, which threaten to undermine Venezuela’s economic recovery.

(Misión Verdad)

Translation: Orinoco Tribune

OT/SC/SA