Venezuela-Iran ties go beyond the oil issue

Jun 03, 2011 12:00 AM

Caracas and Tehran have established a political and trade relationship both in furtherance of energy, production, housing, food and education, and in line with their anti-US discourse, which, incidentally, challenges the international community.

Following the sanctions imposed by the US Department of State on state-run oil holding Petróleos de Venezuela (PdVSA), Venezuelan government authorities, such as Foreign Minister Nicolás Maduro, Minister of Energy and Petroleum Rafael Ramírez and National Assembly (AN) Deputy Speaker Aristóbulo Istúriz have contended that Venezuela will have political and trade relations with whomever it wants.
And, they underscored, "Venezuela will sell oil whomever it feels right to," including Iran, also a Member State of the Organization of Petroleum Exporting Countries (OPEC).

Particularly, Ramírez has insisted on saying that the point at issue is not whether Venezuela sent oil products to Iran, but "it is entitled to have relations with whomever it wants."
And Venezuela has working hard to tighten this tie. Over 270 bilateral agreements have been entered in by Presidents Mahmoud Ahmadinejad and Hugo Chávez. It seems that both governments will not become separated, no matter any diplomatic frictions that may arise.

In the area of energy, the incorporation of a joint venture for the Dobokubi field located in eastern Anzoátegui state, between the Venezuelan Petroleum Corporation and Petropars was authorized. Petropars itself took part in the certification of reserves at the Orinoco Oil Belt and, together with PdVSA, entered into an agreement to establish a transnational exploration and drilling corporation in third countries.
Adding to this, ending 2010 there were news of the building of a refinery in Syria. The facility will have a refining capacity of 140,000 bpd; the plant will be operational by 2012.

Vehicles and universities
The numbers of the Foreign Trade Bank show a soaring trade bilateral relation, from $ 1.1 mm in 2004 to $ 89.3 mm in 2009, $ 88.8 mm of which account for Venezuelan imports.
Major items include foodstuffs. In this context, multiple agreements were executed to install around 28 milk processing plants and some other for corn. Tehran also had a stake in the provision of iceboxes for Mercal, the Venezuelan government food distribution network.

As for housing, an agreement was reached in 2005; it dealt with the building of 10,000 houses in the states of Monagas, Cojedes, Guárico and Portuguesa. For such purpose, the Venezuelan Ministry of Housing reported on a $ 372,952,549 investment.
With regard to industrial production, more than 57 projects were pending in 2010. In this regard, the Venezuelan official discourse on manufacturing of vehicles, tractors and spare parts, namely in Venirauto, organized in 2006, has been emblematic.

Regrettably, Venirauto has failed to attain the goal. In 2010, the company -60 % owned by the Venezuelan government- acknowledged losses and pointed to the assembly of as few as 3,322 units, far behind the target of 16,000 vehicles. In 2007, the goal had been 25,000 units.
Venirauto acknowledged troubles to import the assembly materials from Iran due to "international economic constraints".

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