MercoPress. South Atlantic News Agency

Venezuelan oil will help South African gold production

Chazez is the first Venezuelan president to visit South Africa

South Africa and Venezuela sealed a major oil deal Tuesday during a visit by Venezuela's President Hugo Chavez, who touted it as an example of southern nations cooperating in a new strategic alliance.

"It will be a wonderful day, the day when the first Venezuelan tanker will stop by to leave oil for South Africa" said Chavez after the two countries state oil companies reached agreements on oil and gas. No details of the deals were immediately available, but they were likely to include plans for Venezuela to supply crude at preferential rates to South Africa's PetrosSA state oil company. The deal is particularly important for South Africa, which has been plagued by energy shortages. In January, electricity shortages forced South Africa's gold and platinum mines to shut for five days Venezuela is also eager to explore South Africa's pioneering gas-to-liquid technology, and PetroSA is looking to invest in oil exploration and production in Venezuela. At a news conference after the signing of agreements, Chavez said Venezuela was interested in using South Africa's oil storage capacity of some 45 million barrels and helping expand its refining capacity. With the world in crisis, Chavez said it was imperative that southern nations unite behind a "new strategic agenda, to conduct a true strategic change in international relations". South Africa's President Thabo Mbeki said several agreements signed Tuesday contribute to "the further empowerment of the countries of the south." He refused to say if South Africa would be getting preferential rates from Venezuela, but said "the object is to assist in reducing the costs of energy." Mbeki also said that such state-to-state deals eliminated intermediaries and thus reduced costs. It was Chavez's first visit to South Africa.