Venezuelan President Hugo Chavez vows to broaden Russian investment

Saturday, June 30, 2007

MOSCOW -- Venezuelan President Hugo Chavez called on Russian business leaders Friday to boost their investment in his country, criticizing U.S. companies as "vampires" and inviting Russians to help develop a massive oil deposit.

Chavez, a firebrand leader and vehement U.S. critic, also reportedly confirmed that his country would be negotiating with Russia about purchasing submarines. Russian media have speculated that one of Chavez' key goals during his trip to Moscow was to arrange a new major purchase of Russian weaponry.

At a meeting with Russian lawmakers, Chavez again suggested that the United States had threatened Venezuela and was categorically opposed to Venezuela's buying submarines, according to Russian news agencies.

Chavez arrived Wednesday amid widespread speculation that he wanted to sign a major arms deal, and President Vladimir Putin said the weapons trade was among the topics of talks late Thursday when he met with Chavez.

Earlier Friday, an official with the Russian arms sales monopoly Rosoboronexport said the sides were in talks on the possible purchase of five Project 636 Kilo-class diesel submarines, according to a news report.

"We are conducting these talks, and I hope that this agreement is possible," Innokenty Naletov was quoted as saying by RIA-Novosti. He said there were also talks on supplies of military equipment for ground and air forces.

Caracas already has purchased some $3 billion worth of arms from Russia, including 53 military helicopters, 100,000 Kalashnikov rifles, 24 SU-30 Sukhoi fighter jets and other weapons. The United States has voiced concern about Venezuela's military spending.

Chavez told Russian business leaders that he expects development of a "road map" that will boost and diversify Russian-Venezuelan business ties -- especially in the energy sector, including construction of a natural gas pipeline and oil refineries.

"We are very satisfied with the presence of Russian companies in our oil industry, and will do our best to develop this cooperation further," he said in an address to Russia's Chamber of Commerce and Industry.

Chavez said that at dinner Thursday night with Putin the two leaders agreed to create a fund to support joint projects. With Russia's help, Venezuela is ready to build four oil refineries and plans another 13, he said.

He also invited Russian oil companies to help develop the Orinoco River basin, recognized as the world's single-largest known oil deposit, potentially holding 1.2 trillion barrels of extra-heavy crude.

U.S. giants Exxon Mobil Corp. and ConocoPhillips refused to sign deals this week to keep pumping heavy oil under tougher terms in the basin, signaling their departure from the deposit as Chavez tightens state control over the oil industry.

Other major oil companies Chevron Corp., Britain's BP PLC, France's Total SA and Norway's Statoil ASA accepted the terms, taking new minority stakes.

Chavez, who has called U.S. President George W. Bush a devil, a donkey and a drunkard, again lambasted the U.S. and its "imperialist" policies. "U.S. companies act like Count Dracula, like vampires bleeding our country dry," he said.

Chavez urged Russian companies to invest in construction of a 5,000-mile natural gas pipeline to Argentina, retrofitting Venezuela's dilapidated seaports, and developing its gold mining and chemical and industries.

Both Venezuela and Russia have revisited contracts signed in the 1990s with major oil companies, and slapped back-tax claims on private companies

Later Friday, Chavez traveled to Belarus for meetings and possible talks about an air defense system equipped with radar and anti-aircraft missiles.

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