Obama Vs. Chavez- Round #1

FACTBOX: U.S.- SANCTIONED VENEZUELA’S TIES WITH IRAN

(Reuters) – The United States has sanctioned Venezuelan state oil company PDVSA for trading with Iran, prompting an outcry from the government of President Hugo Chavez.

Both fierce anti-U.S. ideologues, Iranian President Mahmoud Ahmadinejad and Chavez have become close political and commercial allies in recent years, to the irritation of Washington.

Following are some facts about Venezuela-Iran ties.

* GEOPOLITICS: Ahmadinejad and Chavez aim to weaken U.S. “imperialism” and favor a world divided into multiple centers of power. The Venezuelan leader once called his Iranian counterpart a “gladiator of anti-imperialist battles.”

U.S. officials have expressed concerns about Iran’s ties with left-leaning Latin American governments including Brazil, Bolivia and Nicaragua.

Tehran has increased relations with the commodities-rich but economically poor region, promising to build houses, dairies and vehicle factories. It receives diplomatic support for its nuclear program in exchange.

Some in the United States, including right-wing politicians and media, fear the cooperation goes deeper and that Venezuela might help Iran build nuclear weapons, a charge both countries deny.

* NUCLEAR: Like some other Latin American leaders including Bolivia’s President Evo Morales, Venezuela supports Iran’s nuclear program, which Tehran says is for peaceful purposes.

Chavez himself dropped plans to build a nuclear reactor following the March earthquake and tsunami that crippled a Japanese nuclear power plant. He says he is opposed to atomic weapons.

Iran is helping Venezuela map its uranium deposits, although Venezuela does not yet mine the mineral.

* DEFENSE: Iran’s defense minister visited Venezuela in 2010, the first such visit since the 1979 Islamic Revolution. The two countries’ armed forces said a deal between them included cooperation on training, but did not give details.

Venezuela vigorously denied this month reports in European media that Iran was building a missile base in the South American country, though analysts believe there is some sort of military exchange going on between the countries.

* OIL: Venezuela and Iran are allies within OPEC. Last year they agreed to invest $760 million in each other’s energy sectors and Venezuela pledged to export 20,000 barrels of gasoline per day to Iran to a total value of $800 million.

The U.S. State Department said PDVSA delivered at least two cargoes of reformate, a gasoline blending component, to Iran between December 2010 and March this year worth about $50 million.

The gasoline deal would help Iran if Western powers enforce sanctions on fuel imports due to its nuclear program.

* FINANCE: Venezuela and Iran are critics of global financial institutions like the International Monetary Fund and the World Bank. Last year they set up a joint development bank with starting capital of $200 million.

In 2008 the U.S. Treasury Department imposed sanctions on the subsidiary of an Iranian bank operating in Venezuela. Washington said the bank helped Iran channel money to weapons programs. Iran and Venezuela deny the charge.

A U.S. district attorney said in September he was investigating several banks in Venezuela for aiding Iran dodge sanctions.

* ISRAEL: Chavez is popular in the Muslim world, partly because of his strident opposition to Israeli foreign policy. He calls Israel a “genocidal state” for its military actions against Palestinians and for the 2006 Lebanon war, but does not back Ahmadinejad’s claim that the Holocaust is a “deception.”

* TRADE: Venezuelan imports from Iran were worth $89 million in 2009, with exports of just $450,000. The two countries have signed dozens of deals that on paper are worth hundreds of millions of dollars. Iran has built housing developments, dairies and vehicle factories in Venezuela.

Chavez announced in 2006 the establishment of a regular air service between Caracas and Tehran, but the flights were suspended last year.

Source: http://www.reuters.com/article/2011/05/25/us-usa-venezuela-iran-idUSTRE74O6J220110525

FACTBOX- VENEZUELAN OIL ASSETS IN THE UNITED STATES

May 24 (Reuters) – The United States on Tuesday announced
new sanctions on Venezuela’s state oil company PDVSA and six
other smaller oil and shipping companies for engaging in trade
with Iran in violation of a U.S. ban.
Deputy Secretary of State James Steinberg said the
sanctions on PDVSA would prevent it from access to U.S.
government contracts and import/export financing, but would not
affect the company’s sale of oil to the United States or the
activities of its subsidiaries. [ID:nN24277213]
Steinberg said the new U.S. sanctions were aimed at
squeezing Iran’s gasoline supplies, and could have a serious
impact as other companies recognize the risks of doing business
with the Islamic Republic as it faces increasing isolation over
its nuclear program.
Venezuelan President Hugo Chavez in 2009 agreed to supply
Iran with around 20,000 barrels per day of gasoline to help the
country deal with international sanctions that have limited its
ability to import fuels. Later, in 2010, Venezuelan officials
claimed that PDVSA had halted direct fuel supplies to Iran,
saying the country had resolved its fuel shortages.
Venezuela is one of the largest foreign suppliers of crude
to the United States and is home to the largest oil reserves
outside of the Middle East.
The U.S. is the largest oil trade partner to Venezuela.
In 2010, Venezuela’s oil shipments to the U.S. averaged
987,000 barrels per day. In February 2011, the country shipped
878,000 bpd, according to the Department of Energy. The
sanctions would not affect the sales.
In the United States, PDVSA’s refineries are operated by
Citgo Corp, which is controlled by Venezuela’s government and
indirectly owned by PDVSA. The language of the new sanctions
does not indicate that they would impact Citgo’s activities.
The five U.S.-based refineries have combined processing
capacity of about 1.08 million bpd, according to Citgo figures.
These are (in barrels per day):
Wholly-owned U.S. refineries – 759,500
* Lake Charles, Louisiana 429,500
* Corpus Christi, Texas 163,000
* Lemont, Illinois 167,000
Refinery joint ventures share 271,250
* Chalmette, Louisiana 192,500
50/50 with Exxon Mobil Corp (XOM.N)
* St. Croix, Virgin Islands 350,000
50/50 with Hess Corp. (HES.N)
* Merey Sweeny LP 70,000 delayed coker
50/50 with ConocoPhillips (COP.N)
Venezuela also directly ships oil products like gasoline and
diesel to the United States, processed in its own refining
network with capacity near 1.3 million bpd.
EXPLORATION AND PRODUCTION
Chevron Corp (CVX.N) is the only U.S. oil major with
exploration and production operations in Venezuela. The new
sanctions are unlikely to affect those activities, said Harry
Clark, a partner and international trade expert at law firm
Dewey & Leboeuf in Washington.
Both ConocoPhillips and Exxon Mobil had exploration and
production activities in Venezuela which were seized during a
nationalization campaign after President Hugo Chavez took over
operations at several oil projects.
The two companies are currently in arbitration with
Venezuela’s government.
(Reporting by Janet McGurty and Joshua Schneyer; compiled by
Janet McGurty; Editing by Marguerita Choy)
(janet.mcgurty@thomsonreuters.com; Reuters Messaging:
janet.mcgurty.reuters.com@reuters.net; 646 226 3027))

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~ by FSVSF Admin on 25 May, 2011.

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