MARIANNA PÁRRAGA
EL UNIVERSAL

Following an intense day of work on April 16, when South American Ministers of Energy held a session past 10 p.m. without reaching a consensus on the final declaration that the Heads of State attending the First South American Energy Summit -held in the Island of Margarita, eastern Venezuela- would endorse, on April 17 Venezuelan President Hugo Chávez submitted his draft South American Energy Treaty to his South American counterparts, and following disclosure of his plan, live broadcast of the subsequent debates was discontinued without any explanation.

Chávez' plan comprises four major areas, namely, gas, oil, alternative energies and energy saving. Should this project see the light, all countries in the region could undertake joint plans for oil and gas development, processing, transportation and conversion into raw materials for petrochemical compounds to boost domestic energy industries.

Chávez explained that regarding gas development -Venezuela has devised Delta Caribe project, which encompasses plans for gas drilling and under which each country can deal with drilling and export-, his plan provides for construction of the so-called gas industrial compounds (Cigas), which are processing plants to treat gas in South American territory.

From these compounds, liquefied natural gas will be exported -an option Venezuela has not implemented so far. This calls for construction regasification terminals in several countries throughout the region. Another choice for transportation are gas pipelines, with three projects under way: the Great Gas Pipeline of the South, the Transoceanic Gas Pipeline and a new project called Trans-Andean Simón Bolívar Gas Pipeline, linking Venezuela, Colombia, Ecuador, Bolivia and Peru.

The last phase in this area is gas supply to homes and conversion of South American cars to natural gas.

Concerning oil, the Venezuelan ruler's plan outlines joint development of heavy-crude oil Orinoco belt, eastern Venezuela, by state oil corporations in the region. Chávez proposed his South American counterparts to set aside a "South American block" in this area where not only the regional oil holdings already having a stake in this area (Brazilian Petrobras, Argentinean Enarsa and Uruguayan Ancap), would have operations, but also others such as Colombian Ecopetrol and Ecuadorian Petroecuador.

Proven reserves of the areas Chávez offered for development, the location of which was not disclosed, amount to 10.5 billion barrels of crude oil. "It will be available to all South America."

Chávez also suggested taking the bonds the Venezuelan Ministry of Energy and Petroleum is receiving as payment for participation in Orinoco oil blocks -currently being assessed and certified and expected to add up USD 5 billion- and deposit them in a fund for regional projects.

"Thirteen refineries are needed to process crude oil from Orinoco oil belt."

As to the third element in his plan -biofuels- Chávez dealt with this issue with a left hand. He claimed it was necessary to replace lead tetraethyl in standard fuels. Therefore, he said, final fuel volumes are required to comprise 10 percent ethanol. "There is no such a thing as a war on ethanol. Biofuels are a valid strategy, provided that they do not hit food production."

Chávez offered to remove import tariffs on Brazilian ethanol, and also proposed building distillation plants attached to refineries under construction, and said byproducts from such refineries could feed the petrochemicals compounds projected in several countries. "I even would like you (Brazilian President Luiz Inácio Lula da Silva) to convey this message to the United States Government -this may seem a joke, but it is not- for them to allow us to ship sugar cane ethanol to the US without tariffs or with reduced tariffs, because shipping ethanol to Citgo (Venezuelan state oil firm Pdvsa's refining branch in the US) is very expensive."

Finally, regarding energy saving, Chávez praised his Revolutionary Energy Mission as successful, and Colombian President Álvaro Uribe showed interest in knowing further details about this plan.

Translated by Maryflor Suárez R.
msuarez@eluniversal.com