Hugo Chávez deepens petroleum and military ties with Russia
Venezuelan leader recognizes Georgia breakaway states, South Ossetia and Abkhazia as added bonus during Moscow visit.
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Chávez has spent over $4-billion on Russian arms since 2005, including jet fighters, helicopters, and 100,000 Kalashnikov rifles. The official RIA-Novosti said he would likely sign deals for up to $1-billion more, including 100 main battle tanks, three diesel-powered Kilo-class submarines, 10 Mi-28 helicopters, and several land-based anti-ship missiles.
Experts say Chávez's search for more sophisticated weaponry may be due to growing tensions with his neighbor, Colombia. But it also reflects a deeper strategic affinity with Russia, which last year held its first naval war games in the Western Hemisphere – together with the Venezuelan navy – since the cold war ended.
Last year, there was talk about Russian bombers using bases in Venezuela and Cuba.
"Russian cooperation with Venezuela is growing, and it's part of a larger Russian opening to Latin America," says Vladimir Davydov, director of the official Institute of Latin America in Moscow. "We are expecting a number of visits by Latin American leaders in the near future, including Ecuador, Uruguay, and Brazil. The centers of world economic activity are changing, and they want to reach dynamic markets," in Russia and the former Soviet Union, he says.
Russia-Venezuela oil deal soon
A consortium of Russian oil companies is expected to soon finalize a deal with Venezuelan national oil company Petroleos to develop part of a huge oil field in the Orinoco River Basin, which is thought to be the world's single largest oil deposit with as much as 1.2 trillion barrels of extra-heavy crude.
Experts say that politics plays a role here too, because Chávez finds it easier to do business with Russian state-dominated companies, which provides them a boost into a new and potentially lucrative market.
But political payoffs, such as Chávez' surprise recognition of the breakaway statelets, may be the only profit Russia sees, says Mikhail Krutikhin, an analyst with RusEnergy, an independent Moscow-based consultancy.
"Russian companies that do business abroad do not typically repatriate their profits to Russia, so the nation isn't going to benefit from this," he says. "But it's good publicity for Russia, and for Putin and Medvedev, it may be good news for domestic consumption."