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Putin, Chavez Boost Ties in Oil, Nuclear Power

Chavez and Putin in Caracas on Friday. Putin won an oil deal and offered initial support on building a nuclear plant. Fernando Llano

Prime Minister Vladimir Putin oversaw the signing of 31 agreements in oil, nuclear power and trade on Friday during his first visit ever to Venezuela, while President Hugo Chavez said they even held talks on joint space exploration.

The announcement — and Putin's visit more generally — raised eyebrows in the United States, which has had tense relations with Chavez. The former paratrooper regularly denounces what he calls "U.S. imperialism" in Latin America, including close cooperation with his longtime rival, Colombia.

Chavez was on hand at Simon Bolivar International Airport to greet Putin, even though he arrived half an hour early, at 6:30 a.m.

The two immediately set out for the National Panteon to lay flowers at the tomb of Simon Bolivar, a national liberation hero. They then visited the Kruzenshtern, a German-built ship that the U.S.S.R. received after World War II, which was docked in Caracas and housing an exhibit on the war.

Putin was later welcomed with an honor guard at Miraflores Palace, where Chavez awarded him the Orden del Libertador — also named after Bolivar — and gave him a replica of the revolutionary's sword. In return, Putin offered a framed letter from Francisco de Miranda, a Venezuelan revolutionary who proceeded Bolivar.

The one-day trip, which Venezuelan state television called Putin's "first official visit," was listed as a working visit on the Russian government web site.

The sides signed a deal under which Russian oil companies will help explore the massive Junin-6 oil field in exchange for a $1 billion "entry ticket" from Russia. The total cost of the project is estimated at $30 billion.

"I'm happy to transfer the first tranche of $600 million," Putin told Chavez during the signing ceremony, the local Globovision television channel reported. "We will not deceive you."

A source in the Russian delegation said the rest would be transferred this year.

A consortium of Rosneft, LUKoil, Gazprom-Neft, TNK-BP and Surgutneftegaz received a 40 percent share in Junin-6, Venezuela's largest oil field with 52.68 billion barrels of oil.

State-owned Petroleos de Venezuela will own the rest.

Putin said the project would take three decades to develop and could produce 400 million to 450 million barrels of oil per year. The five Russian companies will invest $950 million in the first stage of the project by 2012.

Moscow and Caracas also agreed to include the Russian consortium in the planned development of the Ayacucho-2, Ayacucho-3 and Junin-3 oil wells.

"Russian companies participated in [the development of] these oil fields separately. What we did was sign a document that passed these rights to the consortium," Venezuelan Energy and Petroleum Minister Rafael Ramirez told reporters.

Venezuela could get another $1 billion in bonuses for other oil projects "if all goes well" with Junin-6, Putin said, without elaborating.

In other energy deals, the sides signed a letter of intent to create a nuclear power station with a capacity between 200 megawatts and 500 megawatts.

"We are not going to make a nuclear bomb, but we will develop nuclear energy for peaceful purposes," Chavez said. "We should prepare ourselves for the post-petroleum era."

Venezuela has had blackouts in recent years because of undeveloped infrastructure. Last fall, Chavez called on his countrymen to limit showers to three minutes, stay out of Jacuzzis and take flashlights to the bathroom at night instead of turning on the lights.

Moscow and Caracas also signed agreements on science, culture and education, and Chavez even said they discussed space exploration and the possible joint construction of a launch pad — drawing snickers from Washington.

"To the extent that Venezuela is going to expend resources on behalf of its people, perhaps the focus should be more terrestrial than extraterrestrial," State Department spokesman Philip Crowley said Friday.

The Russian side made no mention of space cooperation.

In other deals, AvtoVAZ will supply 2,250 Lada cars under a deal with state-owned Suvinca, while aircraft leasing company Ilyushin-Finance signed a memorandum of understanding to set up a joint enterprise to make aircraft equipment there. Sovkomflot and Venezuela's PDV Marina said they intended to build tankers together.

Bolivian President Evo Morales, a Chavez ally, also traveled to Caracas to meet with Putin, who gave him a $100 million loan to buy helicopters to fight drug trafficking. Bolivia also agreed to cooperate with Gazprom to develop three gas fields, Morales said Saturday.

Abkhaz Foreign Minister Maxim Gvindzhia, who was also in Caracas, said Friday that the Georgian breakaway regions of Abkhazia and South Ossetia may win recognition from Bolivia and Ecuador.

Chavez, who holds sway with his left-leaning neighbors, recognized Abkhazia and South Ossetia during a visit to Moscow in September.

On Friday, Putin reaffirmed Moscow's intention to supply a $2.2 billion, seven-year loan first discussed during last year's visit, while a source in the Russian delegation told reporters that Venezuela might use the credit line on Russian arms.

Deputy Finance Minister Dmitry Pankin said the terms of the credit had been sent to Caracas, which has not responded. He brushed off suggestions that the loan was linked to future arms acquisitions.

Chavez had said he wanted to buy T-72-S tanks, Smerch multiple launch rocket systems, S-300 and Antey-250 anti-aircraft guided missile systems, although no new arms deals were signed Friday.

Venezuela has bought at least $4 billion in Russian arms since 2005, including Su-30 fighter jets.

The only major reaction from Colombia over the weekend was from Augusto Castro, president of the Bishops' Conference of Colombia, who told Globovision that Hugo was walking a dangerous path with atomic energy.

"This looks disastrous to me. Anyone who possesses [nuclear technology] feels more and more powerful, and at a certain moment can lose control of himself and do terrible things," he said. "I wish President Chavez didn't step into this dangerous minefield."

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