Quito – Venezuelan President Hugo Chavez said here Tuesday that the nations of Latin America need to integrate their economies to face political challenges, but with respect for each country’s sovereignty.
The left-wing populist traveled to Quito to join Ecuadorian counterpart Alfredo Palacio for the signing of accords that Chavez described as “the two foundation stones” of a new phase in energy cooperation between Venezuela and Ecuador, both oil-producing countries.
Those pacts, signed by Energy Ministers Rafael Ramirez of Venezuela and Ivan Rodriguez of Ecuador, will permit Ecuadorian crude oil to be converted into fuel at Venezuelan refineries and then shipped back to this country, saving Quito as much as $300 million, according to officials here.
Rodriguez aide Martha Carrillo told EFE that up to 100,000 barrels per day of Ecuadorian crude will be processed at Venezuelan facilities. The accords also envision Venezuelan assistance to expand refinery capacity here.
After the presidents met privately for more than two hours, Chavez said that while Venezuela is anxious for bilateral and regional integration, it has “respect for the political judgments” of other governments.
“We must put the supreme interest of our peoples, of our republics, above all else; to align with each other in a true unitary strategy. Only united can we liberate ourselves,” he said.
Chavez thanked Ecuador’s president for allowing Venezuela to collaborate in Quito’s new energy policy, which Palacio defined as the “recovery of sovereignty.”
The Venezuelan leader said Palacio is sure to be attacked for his recent decisions affecting Ecuador’s oil industry, which include imposing a windfall-profits levy on the foreign oil companies operating in the Andean nation and canceling U.S.-based Occidental Petroleum’s oil-drilling concession in the Ecuadorian Amazon.
“Certainly he will be attacked. It has cost Venezuela dearly (to overhaul its energy sector), but it doesn’t matter, that is the path. They attack Bolivia, but this is the path,” Chavez said, referring to adverse reactions to La Paz’s May 1 nationalization of natural gas reserves.
It was “beyond belief,” the Venezuelan said, that an oil-exporting country such as Ecuador should have to spend huge sums on importing fuel.
Ecuador’s total daily oil output is roughly 530,000 barrels, less than one-fifth of Venezuela’s, but this Andean nation earned $5.4 billion last year from crude exports, enough to finance almost 40 percent of the government’s budget.
Palacio said that thanks to Venezuela, “Ecuador’s oil policy will change and very soon.”
“We have now taken the appropriate steps so that, very soon, we can begin the construction of new refineries, the expansion of refineries” in Ecuador, Palacio said.
The Ecuadorian president pointed with pride to his recent moves in the oil sector, stressing that they have nothing to do with Quito’s just-suspended talks with Washington on a free-trade treaty.
Palacio also insisted on the need for Latin American integration in achieving “globalization with a human face.”
Despite his assertion to the contrary, the two oil-related disputes do appear to have torpedoed the trade negotiations with the United States, much to the dismay of the Ecuadorian business community, which fears being at a disadvantage to rivals in neighboring Colombia and Peru, whose governments this year signed trade pacts with Washington.
Some analysts in Ecuador suggested before his arrival that Chavez will try to exploit Quito’s flap with Washington to recruit this Andean nation into the Venezuelan leader’s “Bolivarian” project for regional integration, conceived by Caracas as an alternative to the U.S.-proposed Free Trade Area of the Americas.
But senior Ecuadorian officials sought to downplay such speculation, saying that Palacio’s government has no interest in adhering to an anti-U.S. bloc or in joining the increasingly close alliance of Venezuela and Bolivia to create a Caracas-La Paz-Quito “axis.”
