Russia – Venezuela Defense News

Couple of quick summaries to start the week off:

1.  Upgrade of Nuclear Deterrent ordered:

(Moscow Times) 29 September 2008.  President Dmitry Medvedev on Friday announced plans to create an upgraded nuclear deterrence system by 2020, including a space defense system and new nuclear submarines.

“A guaranteed nuclear deterrent system for various military and political circumstances must be provided by 2020,” Medvedev told military commanders after military exercises in the southern Orenburg region.

The president made no mention of the new Borei-class nuclear submarines, which are designed to carry a new intercontinental missile that is seen as a key future component of Russia’s nuclear forces. The missile was successfully test fired earlier this month after repeated failures. The first of the new submarines is to be commissioned later this year, and two more are being built.

Medvedev ordered military commanders to present him with an action plan for implementing the changes by December.

2.  Hugo’s Most Excellent Shopping Adventure:

(Moscow Times) 26 September 2008.  The Kremlin had a warm welcome waiting for Venezuelan President Hugo Chavez Thursday, in the form of a $1 billion loan for arms purchases for the Latin American leader who has been fiercely critical of the United States and its leaders.

The billion-dollar loan would allow Venezuela to partake in aviation technology programs, the Kremlin said in a statement Thursday. It did not elaborate but praised defense technology cooperation between the two countries, highlighting that 12 arms deals, worth a total of $4.4 billion, had been signed from 2005 to 2007.

National media reported that Chavez’s visit, barely two months after he last came to Moscow, was hastily planned after the war in Georgia sped up military cooperation between both countries.

Venezuela is in talks to buy Russian air-defense systems and armored vehicles and has expressed interest in the new Su-35 fighter, due off assembly lines in 2010, Russian Technologies chief Sergei Chemezov said during a visit to Caracas earlier this month.   Earlier reports suggested that the country is eyeing missile-defense systems, submarines, patrol boats and Ilyushin reconnaissance aircraft.

Of course, such benefits come with a price

The talks between Chavez and Medvedev are to focus on trade and energy relations, the statement said, adding that trade between the two countries had more than doubled, to $1.3 billion, from 2006 to 2007.

Last week, a Russian delegation headed by Deputy Prime Minister Igor Sechin returned from Caracas, where Gazprom and seven other companies signed deals with state-owned Petroleos de Venezuela to develop offshore gas fields.

And sure enough, today’s headlines:

(Moscow Times) 29 September 2008.  Venezuelan President Hugo Chavez agreed Friday to give broad access to his country’s oil riches to five Russian companies, Russian Energy Minister Sergei Shmatko said.

The deal came after a meeting between President Dmitry Medvedev and Chavez in Orenburg, where the Venezuelan leader reiterated his support for Russia’s actions in last month’s military conflict with Georgia.

State-controlled Gazprom and Rosneft, as well as private companies Lukoil, TNK-BP and Surgutneftegaz, plan to pour “tens of billions of dollars” of investment into Venezuela, Shmatko said.

The Russian and Venezuelan energy ministries signed a memorandum of understanding Friday that calls for the Russian companies to link up in a consortium to form a joint venture with Venezuelan state oil company Petroleos de Venezuela SA, or PDVSA, Shmatko said.

“It is a colossus being born,” Chavez said live on Venezuelan state television from Russia.

Hugo, being understated as he is wont to do…

As Medvedev and Chavez watched Friday, Miller and Venezuelan Oil Minister Rafael Ramirez signed a broader memorandum of understanding envisioning cooperation on developing fields, building infrastructure, producing oil and gas and refining, Gazprom said in a statement.

The memorandum also lists transportation of hydrocarbons, exploration and evaluation of reserves, production of liquefied natural gas and field services, including drilling and well maintenance, as areas of joint interest, Gazprom said.

LUKoil, Russia’s second-largest oil producer, also has experience working with PDVSA. The companies began working together on the exploration of the Junin-3 block near the Orinoco River in 2005, a project that was extended during Chavez’s July visit.

And it’s not just about the oil…

On Friday, Medvedev and Chavez discussed the possibility of forming a gas cartel, Miller said without elaborating.

Russia, Venezuela and Iran are the main backers of turning the existing Gas Exporting Countries Forum into a more influential organization but have said the entity would not seek to fix prices.

“Will you walk into my parlor?” said the spider to the fly;
“‘Tis the prettiest little parlor that ever you did spy.
The way into my parlor is up a winding stair,
And I have many pretty things to show when you are there.”