Venezuela: U.S. shouldn't touch Iraqi oil , back off
Washington Times By Bradley Brooks UPI Business Correspondent
RIO DE JANEIRO, Brazil, April 25 (UPI) -- Venezuela's President Hugo Chavez -- at the helm of the world's fifth-largest oil exporting country -- said Friday during a visit to Brazil that the United States should keep its hands off Iraqi oil.
"The Iraqi oil should be left for Iraq, it should be administered by Iraqis, and I can't conceive of there being a new colony, that would begin in the 21st century a new era of colonialism, which would set us back 500 years," he told reporters.
"What is happening in Iraq is lamentable, we agree with (Brazilian President) Lula and the Brazilian government, and from the first moment we rejected this war," Chavez said.
Chavez -- making his third visit to Brazil since the presidential inauguration of fellow leftist Luiz Inacio Lula da Silva -- is set to sign an agreement that will strengthen ties between the two countries' state-run oil companies.
But Chavez also hopes some of the political magic of Lula -- the most popular leader in Latin America -- rubs off on him.
Late Thursday, the secretary general of the Organization of American States told reporters in Caracas that talks had stalled between Venezuela's government and the opposition demanding the resignation of Chavez.
Cesar Gaviria, the OAS official, said that an April 11 agreement between the two sides had fallen through.
Gaviria said, without elaborating, that the talks that began eight months ago had ended. He didn't give any indication as to when they might begin.
Opposition protesters and strikers have been demanding Chavez exit the presidency for well over one year.
The tension culminated in the temporary overthrow of Chavez last April, followed by months of crippling nationwide strikes that were called off in February.
Opponents are seeking a referendum to be held after August on whether Chavez should remain in his post.
Political analysts say that despite their shared history in the leftist movement of Latin America, Lula is unlikely to take a high-profile role in helping Chavez gain international political support.
Lula has taken a decidedly centrist track since his election, pleasing Wall Street with his business-friendly and austere economic moves.
Lula has also dismissed Chavez's tactics as a leader, saying he is working to unite Brazil, rather than ignite a situation that pits one half of the country against the other, as in the case of Venezuela.
To underscore that, Brazilian officials told reporters that Friday's meetings were meant to be purely about business, and whether Brazil's national development bank will lend upward of $1 billion to Venezuela for the purchase of Brazilian-made products.
"This meeting is a significant leap forward in the commercial and political relations between both nations," said Wladimir Villegas, Venezuela's ambassador to Brazil.
Brushing off criticism that the loan could be construed as a sign of strong political support for Chavez, Brazilian officials said the deal was intended to strengthen overall bilateral ties, not those between individual leaders.
Lula and Chavez will also sign Friday an agreement that will further entrench the business dealings between PDVSA and its Brazilian counterpart, Petrobras. Neither company would comment on details of the agreement.
But reports in the Brazilian press indicate a promise by Brazil to buy more goods from PDVSA and an agreement to let the Venezuelan company participate in a $2 billion refinery project in northeastern Brazil are likely included.
The refinery, which would be constructed over the next three years in the state of Pernambuco, would eventually produce 220,000 barrels of oil per day, industry officials say.
Whatever increased business relations Chavez can score on his trip to Brazil are sorely needed, analysts say.
Last year, amid political upheaval, Venezuela's economy shrank by 8.9 percent. There was inflation of 32 percent last year, and the unemployment rate hovered near 18 percent.
Additionally, Venezuela's currency dropped steeply until the government in late January halted foreign exchange sales. Chavez also ordered capital controls.
Most economists say Venezuela's economy is likely to shrink by more than 10 percent this year.
Meanwhile on Friday, PDVSA officials announced in Venezuela that the company will pay some $700 million a month in taxes in the second quarter, easing concerns that the government was going to default on its foreign debt.
The increase in receipts indicates that PDVSA -- which pays about half of the taxes Venezuela takes in -- is beginning to collect overdue payments owed it since the company restarted exports in January after the two-month general strike.