[R-G] Venezuela cuts oil to US

[Anthony Fenton]

Copyright 2007 Intelligence Research Ltd
All Rights Reserved
Latinnews Daily

July 2, 2007 Monday

LENGTH: 309 words

HEADLINE: Venezuela cuts oil to US

BODY:


Development: The US Ambassador to Venezuela, William Brownfield, said  
on 30 June, that Venezuelan oil exportatation to the US has fallen by  
30%.

Significance: Venezuela, despite its antipathy to the US, has been  
the US's third or fourth biggest oil supplier for the past decade. In  
2002, Venezuela was exporting 1.5m bpd to the US. Currently, it is  
shipping 1.1m bpd. OPEC places Venezuelan crude oil production at  
3.1m bpd and crude oil exports at 2.198m bpd.

Brownfield commented that while the US pays full price for Venezuelan  
oil, he believes the majority of other buyers are not doing the same.  
The buyers he implicates are other Caribbean and Latin American  
countries that have financial agreements with Venezuela.

President Hugo Chávez met with Russia's president, Vladimir Putin,  
this past weekend to speak about joint ventures in natural gas and  
oil production between Venezuela and Russia. According to Chávez,  
Putin has agreed to the creation of a fund for joint projects. With  
this fund, Chávez would build 17 new oil refineries.

Chávez looked for Russian business investment in the building of a  
4,970-mile natural gas pipeline to Argentina as well as the  
development of the Orinoco River basin. The Orinoco River basin is  
the world's single-largest known oil deposit. Russian company  
investment would also aid his plans to renovate seaports and develop  
gold mining and chemical industries. Chávez has recently nationalised  
more of this area, presenting U.S. companies such as ExxonMobil,  
ConocoPhillips, and Chevron with deals restricting their drilling in  
the basin. ExxonMobil and ConocoPhillips refused to sign the deals  
this past week.

President Chávez has long threatened to cut oil exports to the US,  
but it is unclear whether the current fall in exports is a deliberate  
policy choice or the result of Venezuela's production difficulties.