Venezuela-Ecuador: Joint Mining, Fishing, Cacao, Auto Lubricant Companies — Steel Co. on the Horizon

Posted on March 28, 2010


Venezuelan President, Hugo Chavez and Ecuadoran President, Rafael Correa

Venezuela and Ecuador Create Joint Mining, Fishing, Cacao, Auto Lubricant Companies
By James Suggett-

Mérida, March 27th 2010 ( – On Friday, Ecuadoran and Venezuelan officials created a series of bi-national companies to produce automobile lubricant and food, and progressed on plans for joint oil and gas exploration, in what the leaders called a step forward for continental integration.

Presidents Rafael Correa of Ecuador and Hugo Chavez of Venezuela headed the summit in Caracas, where they discussed joint projects in energy, agriculture, communications, science, mining, culture, and commerce. It was their seventh such meeting since regular meetings began in 2007.

The two countries announced the creation of joint companies to produce a new brand of automobile lubricant, fish, and cacao. A new binational mining company was created, which will initially explore for gold, phosphates, and emeralds in Ecuador, according to Prensa Latina. They also smoothed out the framework for an Ecuador-Venezuela Development Fund, to be operated by and for both countries.

President Correa announced that Venezuela had agreed to trade its oil derivatives for Ecuador’s crude oil, saving refinery-deficient Ecuador as much as $300 million in costly imports. Correa said the deal was an example of “the solidarity and brotherhood of the Bolivarian Revolution with the peoples of the world.”

In previous binational summits, Venezuela assisted Ecuador with the creation of the public television channel EcuadorTV, invested $21 million in services for Ecuador’s disabled, and made a donation of fighter jets to the Ecuadoran Air Force.

Correa said the two countries are planning to create what will be the continent’s largest steel company. In addition, the countries already have several energy-related joint projects underway. The state owned oil companies PetroEcuador and PDVSA are conducting joint drilling for oil in Venezulea’s Orinoco Oil Belt and for natural gas in northern Ecuador. Over the last two years, PetroEcuador and PDVSA announced plans for a $6.5 billion refinery and a possible $5 billion petrochemical plant near the Port of Manta, Ecuador.

President Chavez said the deals were part of “a new model of integration” marked by cooperation among nations and freedom from U.S. imperialism. Venezuela and Ecuador are among the eight members of the trade bloc ALBA, which stands for Bolivarian Alliance for the People of our Americas and is an alternative to U.S.-dominated free trade.

“The energy axis is vital… it’s a matter of our independence,” said Chavez. “ALBA has formed a space, a solid nucleus for a new project… anti-imperialism has its axis in the ALBA.”

Among other issues discussed was the possibility of increasing military cooperation, which the two presidents said was only for the purpose of national defense, particularly against the United States, which has reactivated its southern naval fleet and installed thousands of new military personnel on seven bases in Colombia.

“With the advance of revolutionary movements in Latin America… the empire has seen itself obligated to resort to the threat of military force,” Chavez said on Friday. “We are obligated to increase our capacity for defense.”

Venezuela has forged similar relations using binational development funds and joint companies with countries such as Bolivia, China, Russia, Portugal, South Africa, and Cuba in order to forge what the government calls a “multi-polar” world that is not dominated by any superpower.

Posted in: Venezuela