Russian oil companies to remain in Venezuela in short-term regardless of Chavez's death - expert

Russian oil companies will continue to operate in Venezuela in the short-term at least, even if the opposition comes to power and changes the country's political and economic course, because the country is in a difficult economic situation and needs stable oil production, a lead researcher at the Latin America Institute of the Russian Academy of Sciences, Viktor Semyonov told Interfax.

He said that if opposition leader Henrique Capriles comes to power following the death of President Hugo Chavez on March 5, as he has a good chance of doing, this will not affect the operations of Russian oil companies in Venezuela in the short-term.

"Henrique Capriles has said that he will reconsider contracts with China and Russia in the area of arms shipments," Semyonov said. "He has not said anything about oil, there has not been any aggression toward this sector. I believe that the strained economic conditions in which Venezuela remains after the death of Hugo Chavez will only get worse."

"Disruptions in food supplies are increasing, energy prices are rising, difficulties are emerging with subsidies to the poor," he added. "Therefore, it's particularly important that everything remain stable in the oil sector so that oil is produced and revenues are generated from it."

He said that Russian companies, in the process of the nationalization of Venezuela's oil industry, "did not take those projects from which Americans were expelled."

"Russian oil companies are primarily investing money in new projects. In particular Junin 6, where production is expected to be about 22 million tonnes of oil in six to eight years. A substantial amount of oil will be produced at Junin 6 this year already, which is extremely important for Venezuela. Therefore, in the short-term future, a year or two, Russian oil companies will certainly work in Venezuela, and then we'll see," Semyonov said.

He said Russian oil companies' contracts would also be difficult to pick apart in legal terms.

"Intergovernmental agreements were signed, bonuses were paid, investments are already being made. Russia worked a long time to secure these contracts. Far longer than, for example, Belarus and China, which began to work in Venezuela earlier than Russia," Semyonov said.

Venezuelan Petroleum & Mining Minister Rafael Ramirez, who is also head of state oil and gas company PDVSA, said the country would continue Chavez's policy in the oil sector. There are no plans to reverse such a distinguished legacy left by Chavez as his oil policy, Ramirez said in a statement posted on PDVSA's website.

Chavez pursued an aggressive policy of nationalizing the country's oil industry, in the course of which Venezuela broke of contracts with American companies such as ExxonMobil. At the same time, Chavez invited companies from countries that were his political allies, such as Russia and China, to work in the country.

During Chavez's rule, Russia joined one of the biggest oil projects in Venezuela, Junin 6. A Russian National Oil Consortium was formed for this project, consisting of state oil major Rosneft, Lukoil, Surgutneftegas, TNK-BP and Gazprom Neft. In addition, under Chavez Rosneft considerably expanded its presence in Venezuela.

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