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Tuesday, July 22, 2008

Russia to Install Military Bases in Venezuelan Soil

Russian-Venezuelan high-level talks in Moscow might result in military-technical, oil deals - sources

     MOSCOW. July 22 (Interfax) - Russian President Dmitry Medvedev will
hold talks with Venezuelan President Hugo Chavez who arrived in Moscow
on a visit on Tuesday morning.
Chavez' visit will continue until July 23, a Kremlin spokesperson
said earlier. The Venezuelan president is also expected to meet with
Russian Prime Minister Vladimir Putin, who spoke to Chavez on many
occasions while being the president. It will be Chavez' first personal
meeting with Medvedev.
Chavez was last in Russia in June 2007.
During this visit the parties are expected to complete their work
on an agreement on reciprocal encouragement and protection of
investment, said Deputy Prime Minister Alexander Zhukov.
The Venezuelan president may also negotiate the purchase of Russian
"During Venezuelan President Chavez' visit to Russia new contracts
can be signed for the supply of Russian arms and military hardware to
," a source in the defense industry told Interfax.
"A number of arms contracts have already been agreed upon and could
be signed during Chavez' visit to Moscow," he said.
Venezuela is planning to buy from Russia up to 20 Tor-M1 surface-
to-air missile systems and three Varshavyanka-class diesel electric
submarines. These contracts could be worth a total of over $1 billion.
Subsequently Venezuela is planning to buy six more non-nuclear
submarines and several dozen surface vessels of various classes and
types, he said.

Russian exporters have offered to Venezuela Mirazh patrol boats of
Project 14310, Murena-E air cushion landing craft of Project 12061E,
mobile coastal missile systems capable of destroying surface vessels,
boats and landing craft at a range of between seven and 130 kilometers.
"Contracts will also be signed for the opening in Venezuela of
special technical service centers for post-sale service of the earlier
supplied weapons and military hardware
," the source said.
Talks are also being held on the of patrol aircraft based on the
Ilyushin Il-114 airplane supply to Venezuela. According to early
arrangements, Caracas is planning to buy up to 20 airplanes of this
Russia has also received from Venezuela a request for the purchase
of Mi-28N helicopters, which cannot be supplied before the second half
of 2009. According to independent experts, ten Mi-28N combat helicopters
could be supplied to Caracas at the initial stage.
100,000 Kalashnikov assault rifles in the new AK-103 modification
have already been supplied to Venezuela
under earlier contracts worth a
total of around $4 billion, the official said. Two factories are also
being built for the licensed assembly of Russian assault rifles and the
production of related ammunition. Also, 24 multi-purpose Su-30MK2
fighters and around 50 Russian helicopters, including 34 Mi-17V, ten Mi-
35M and three Mi-26T, are being successfully supplied to Venezuela under
a contract
In accordance with the program for re-armament of the Venezuelan
Army until 2012, Caracas is planning to spend over $30 billion for the
purchase of weapons and military hardware, the source said.

Russian could grant a loan of about $800 million to Venezuela to
finance the arms purchases, Russian media outlets said.

The visit by Venezuelan President Hugo Chavez to Russia proves
Moscow's plans to increase its economic presence in Latin America, said
Vyacheslav Nikonov, a political scientist.
"Russian influence in Latin America has really strengthened since
we started paying attention to this region," he said. The key aspect of
the visit is the expected signing of contracts for the supply of Russian
arms for the Venezuelan army, he said.
Moreover, it is very important for Chavez to meet personally the
new Russian president, said Nikonov. "I understand that it will be
important for him to establish a personal contact with President
Medvedev," the political scientist said.
"The United States will certainly have a negative view of this
visit, like of any other foreign contact of Hugo Chavez, who is a source
of great annoyance for Washington," he said.
Meanwhile, a source in Lukoil told Interfax that the company
management is planning to discuss matters related with it's continued
operations in Venezuela with Chavez. In particular, the parties will
talk about the completion of the assessment and certification of the
Junin-3 field and further steps in this project
, he added.
It was expected that Lukoil and the Venezuelan state-owned company
PdVSA will set up a joint venture to develop the Junin-3 field situated
in the Orinoco Heavy Oil Belt in the eastern part of the country. The
company planned to complete the talks on the joint venture in 2007.
Lukoil chief Vagit Alekperov said in late June that the company is
not planning to leave Venezuela, despite delays in the signing of
contracts under oil production projects.
A source in TNK(RTS:TNKO)-BP told Interfax that the company is also
planning to meet with members of the Venezuelan delegation. TNK-BP said
earlier that it was interested in working in Venezuela.
In 2007, TNK-BP signed an agreement with PdVSA on joint
certification and assessment of the Ayacucho Block 2 in the estuary of
the Orinoco river. If both parties remain satisfied with the results of
their cooperation, they could decide to set up a joint venture. TNK-BP
chief Robert Dudley said that the assessment of the Ayacucho Block 2 is
a very complicated project, as the oil there is very heavy. Everything
is still at the initial stage and a decision as to whether to carry out
this project will not be made earlier than 2009, Dudley said. Total
investment in the project could total several billion dollars, he said.
At the same time, Gazprom's subsidiary Gazpromneft, which
repeatedly stated that Latin America was one of its promising business
opportunities, is not planning any formal meetings with the Chavez
Zarubezhneft, which also sees a potential in the Latin American
mineral resources, would not speak to Interfax about possible meetings
with Venezuelans in Moscow

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