Venezuela to Invest in Refineries in Brazil and Argentina

Caracas, Venezuela, October 1, 2005—Venezuela reached separate agreements with Brazil and with Argentina to invest in refineries in the two respective countries. Venezuela’s President Chavez announced the plans were during a summit of the Community of South American Nations (CSN), which took place last week and was attended by the leaders of Chile, Bolivia, Peru, Paraguay, Ecuador, Venezuela, Brazil, and Argentina.

Venezuela and Brazil agreed to invest $2.5 billion in building a new refinery in northeastern Brazil, in Pernambuco. Ownership of the refinery will be split evenly between the two countries and will process 200,000 barrels per day of heavy crude from both Venezuela and Brazil. The refinery is scheduled to begin production by 2011 and would be Brazil’s first new refinery since 1979.

Other projects that Brazil and Venezuela agreed to pursue include Brazil's participation in the production of natural gas, off the Venezuelan coast, in the area known as Gran Mariscal Sure. This project would involve an investment of $2.2 billion to exploit a field that is said to hold 4 TCF (trillion cubic feet) of natural gas.

In a third project with Brazil, Venezuela will engage in a joint venture to produce 150,000 barrels of extra-heavy crude per day from the Orinoco Oil Belt.