WAR Chavez calls for alliance with Russia to protect Venezuela from the USA

Venezuela's Chavez calls for alliance with Russia
By MANSUR MIROVALEV, Associated Press Writer Tue Jul 22, 12:35 PM ET

BARVIKHA, Russia - Venezuelan President Hugo Chavez, visiting Moscow to pursue weapons and energy deals, on Tuesday called for a strategic alliance with Russia to protect his country from the United States.

Chavez has repeatedly accused Washington of plotting an invasion to destabilize his government, despite U.S. denials.

The alliance would mean "we can guarantee Venezuela's sovereignty, which is now threatened by the United States," Chavez told reporters shortly after his arrival in Moscow.

Chavez is in Russia to broker a number of deals involving weapons purchases, oil exploration and possibly the creation of a joint financial institution.

Welcoming Chavez at Meiendorf Castle, his residence outside Moscow, President Dmitry Medvedev said Russian-Venezuelan relations "are one of the key factors of security in the (South American) region."

It is the presidents' first meeting since Medvedev took office in May.

Venezuela's state-run oil company Petroleos de Venezuela SA signed separate deals with three Russian energy companies — Gazprom, Lukoil and TNK-BP — during the first day of Chavez's visit.

In addition, Russian media have reported that Chavez is expected to reach a number of agreements for purchasing Russian military hardware while in Moscow, with one paper reporting the deals could be worth up to $2 billion.

The newspaper Kommersant, generally regarded as reliable, reported Tuesday that Chavez is looking to order Ilyushin jets, diesel-powered submarines, Tor-M1 air defense systems and possibly tanks. It did not specify its sources.

"We want peace, but we are forced to strengthen our defense," Chavez said when asked about the potential deals upon his arrival.

Rosoboronexport, Russia's state-owned arms trader, declined to comment on potential deals.

Venezuela, which spent $4 billion on international arms purchases between 2005 and 2007, mostly from Russia and China, has a defense budget of $2.6 billion, according to the London-based International Institute for Strategic Studies.

The U.S. stopped supplying arms to Venezuela in 2006.

The three energy agreements involve exploring new oil fields in Venezuela. Chavez said they signified the "creation of a new strategic energy alliance" between Russia and Venezuela.

The deal with TNK-BP was particularly striking given the company's ongoing dispute between its Russian and British shareholders.

"For TNK-BP it is a positive sign that the shareholders' conflict has had no effect on the business," said Valery Nesterov, an analyst at Troika Dialog, an investment bank.

On Tuesday BP announced it would recall 60 technical specialists from Russia.

Chavez also wants to discuss the possibility of creating a joint bank, according to Alexis Navarro, Venezuela's ambassador to Moscow.

The Venezuelan president also met Prime Minister Vladimir Putin and was to meet Russian military and business leaders.

Commercial trade between Venezuela and Russia reached $1.1 billion last year, almost double the $517 million in trade during 2006, according to statistics cited by Venezuela's state-run news agency.

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Chavez Goes Weapons Shopping in Russia Amid Arms Race (Update2)
By Matthew Walter

July 21 (Bloomberg) -- Venezuelan President Hugo Chavez heads to Moscow today to shop for air defense systems, submarines and other weaponry as Latin America's arms race quickens amid signs that his regional influence is waning.

Past Venezuelan arms purchases from Russia have strengthened ties with Moscow as its rivalry with the U.S. intensifies over President George W. Bush's plans for an Eastern Europe missile defense system and other issues. Chavez, 53, also plans to visit Belarus, a Russian ally that the U.S. considers a dictatorship.

Chavez ``regularly refers to us as an `empire,' opposes our initiatives in the Americas and seeks out our adversaries as friends and allies,'' Assistant U.S. Secretary for Western Hemisphere Affairs Thomas Shannon said July 17 in testimony to a congressional committee.

Chavez will order $2 billion worth of weapons, including Project 636 diesel subs, Mi-28 combat helicopters and airplanes made by Ilyushin Co., the Russian newspaper Kommersant reported May 12, without saying how it obtained the information. The Russian Interfax news service, citing an unnamed defense ministry official, said today Chavez may order $1 billion of weapons, including three Varshavyanka subs and up to 20 Tor-M1 air-defense systems.

`Some Shock'

``What Chavez likes to do is to shock, and this will create some shock in Washington,'' said Riordan Roett, a professor of Latin American studies at Johns Hopkins University.

Chavez, who plans to meet Russian President Dmitry Medvedev tomorrow, has bought more than $4.4 billion of Russian arms since 2003. He says the hardware, including jets and submarines, is needed to counter a military threat from the U.S. and its main regional ally, Colombia.

Russia last year announced plans to build two factories to make Kalashnikov assault rifles in Venezuela.

Russia has used Venezuela to diversify its arms-selling business beyond China and India, said Dmitry Vasiliev, an analyst at the Center for the Analysis of Strategies & Technologies, a Moscow-based defense research center. Venezuela was Russia's third-biggest arms customer last year, he said.

Trade between the two countries surged to $1.13 billion in 2007 from $517 million the previous year, according to a statement published on the Venezuelan Information Ministry's Web site.

`Ideal Partner'

``Russia is trying to be good friends with Chavez because he is an ideal partner in arms trade,'' said Fyodor Lukyanov, an analyst at the Council on Foreign and Defense Policy in Moscow.

The Venezuelan president said this month he'll also discuss the creation of a joint development bank and an investment fund with Russia.

Latin American countries have gone on a military spending spree in recent years as their governments collect record income from commodities, including Venezuela's oil windfall. Regional arms spending jumped 55 percent over four years to $38.4 billion in 2007, according to the International Institute for Strategic Studies.

The buildup comes amid increased regional rivalries. Chavez was outmaneuvered this month when Colombian President Alvaro Uribe rescued 15 hostages from the Revolutionary Armed Forces of Colombia, including former presidential candidate Ingrid Betancourt and three Americans.

Chavez had been trying to negotiate the captives' release from the guerrilla group, while denying accusations by the U.S. and Colombia that he had supported the FARC rebels with arms and funding. Uribe has been increasing military pressure on the FARC since becoming president in 2002, with the help of $5 billion in military assistance from the U.S.

Colombia-Brazil Accord

Colombia and Brazil on July 19 signed an accord to strengthen military ties, promote the sale of weapons and expand joint training exercises.

Venezuela ordered troops moved toward the Colombian border in March, after Colombia conducted an anti-FARC raid into neighboring Ecuador, a Chavez ally. The three countries later moved to mend relations.

In May, Chavez said he was prepared to scramble his fighter jets after a U.S. Navy S-3 aircraft flew into Venezuelan airspace. The U.S., which buys about 1.36 million barrels of oil a day from Venezuela, says the incursion was due to a navigational error.

The U.S. has tried to isolate Chavez. It cut off U.S. arms sales to Venezuela in 2006, refusing to sell it F-16 jet replacement parts, and declared that the government ``isn't fully cooperating'' in the war on terror.

Missile Test

Since then, Chavez has stepped up purchases from Russia. Last month, the Venezuelan military fired its first test missile from a Russian Sukhoi fighter jet.

Chavez will also travel to Spain and Portugal this week to discuss energy and trade accords. Lisbon-based Galp Energia SGPS SA, Portugal's biggest oil company, has agreed to work with state oil company Petroleos de Venezuela SA to build liquefied natural gas plants.

Chavez last month threatened to stop selling oil to Europe and outlaw investment from European countries after the EU passed legislation allowing detention of undocumented workers.

``With all due respect, I recommend that the leaders of Europe make a sustained effort to understand what's happening in Latin America,'' Chavez said in a speech last month. ``They don't understand us.''

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Worrier King said:

We put in Missile shields in Georgia, Russia puts in weapons systems in Cuba and Venezuela.

And thats the way it goes.

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Q Dana, did you look into the report about the Russian bombers in Cuba?

MS. PERINO: Yes, it appears to be just speculation and hypotheticals right now. I would repeat that what President Bush said to President Medvedev and had said to President Putin beforehand on our missile defense plan is that we want to work with them, we seek a strategic partnership with the Russians. We are working to prevent missiles from rogue nations. We do not believe that Russia is a threat. Nor do we believe that our missile defense system would be any sort of a match-up against the vast arsenal of weapons that Russia has. So our target is not Russia. In fact, what we would like to do is work as equal partners with Russia, with the Europeans and here in our own country. We've been trying to have a dialogue with them. The Russians have said that they will keep having that dialogue. So on that specific report, I'll decline to comment, since it seems speculative at this point.

Q Wouldn't you think it's alarming if Russia --

MS. PERINO: I think that commenting on speculative reports is not a good idea. That's all I have on that.

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Chavez: Bring on the ruble
Wed, 07/23/2008 - 11:30am

Despite assurances from some that the declining dollar will remain the world's primary reserve currency, there may be an emerging threat -- the Russian ruble. That is, at least, if Hugo Chávez has his way:

Chávez echoed Russian calls to make the ruble a major reserve currency in opposition to a weakened dollar. "The ruble must become a world currency," he said. "The dollar must not become a world currency."

After inking a $1 billion arms deal in Russia, Chávez continues his European tour with visits to Belarus, Portugal, and Spain. No word on whether he's considering a stop to see Barack Obama's speech in Germany.

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Russia, Venezuela strengthen energy ties
1 day ago

BARVIKHA, Russia (AFP) — Leading oil and gas producers Russia and Venezuela will coordinate energy policies, Russian President Dmitry Medvedev said Tuesday after meeting his Venezuelan counterpart Hugo Chavez.

The talks at Medvedev's residence outside Moscow included discussion of arms deals and resulted in an agreement for three Russian companies -- Gazprom, Lukoil and TNK-BP -- to work in the energy-rich Orinoco Belt in Venezuela.

"Russia and Venezuela are oil and gas powers and energy security depends on our combined actions. We will work on coordination but our cooperation is not aimed against third countries," Medvedev said after the talks.

"It is mutually advantageous and is not only our countries but also those who cooperate with us who will benefit from this cooperation," he added.

Medvedev, a former chairman of Russian gas giant Gazprom, added that a proposal to create a group of leading gas producers that would mirror the Organisation of the Petroleum Exporting Countries (OPEC) was "not closed."

Iran and Venezuela, members along with Russia of the Gas Exporting Countries Forum, have both supported the idea of creating a "gas OPEC." Russia is by far the world's largest gas producer, controlling a quarter of global reserves.

The prospect of a gas OPEC has raised fears in the European Union and the United States of a possible cartel. Energy analysts have generally dismissed the prospect because of differences between the oil and gas businesses.

"Russia and Venezuela must become strategic allies in the oil sphere and in military-technical cooperation," Chavez was quoted by RIA Novosti news agency as saying upon his arrival in Moscow on Tuesday.

"This will guarantee the sovereignty of Venezuela because we are now threatened by the United States," he added.

After the meeting with Medvedev, Chavez stressed military ties were "particularly important."

He then held talks on arms deals with Prime Minister Vladimir Putin and the head of Russia's arms export monopoly, Sergei Chemezov.

A member of the Venezuelan delegation was quoted by Interfax news agency as saying: "We expect the signing of a range of contracts" in the arms sector. He added that the purchases could include Russian tanks and submarines.

Earlier, a Russian arms industry source told Interfax that Venezuela was planning to buy 20 Tor-M1 air defence systems and three submarines for a total value of one billion dollars (630 million euros).

Moscow and Caracas have already signed four billion dollars (2.5 billion euros) worth of arms contracts in recent years including Kalashnikov assault rifles and military helicopters, Rosoboronexport said.

At the meeting with Medevdev, Chavez stressed his agreement with Russia's outlook on global affairs by passing on warm greetings and a message from his ally, veteran Fidel Castro.

"Fidel and many other friends in Latin America have asked me to greet you," Chavez told Medvedev. "Fidel speaks of a crisis of reason, especially in the most powerful countries. Russia has restored this reason," he said.

Chavez's visit to Russia is the first leg of a European tour that will take in Belarus, Portugal and Spain. In Spain, Chavez has said he will hug King Juan Carlos following a spat last year in which the king told him to shut up.

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