US embassy cable - 04CARACAS3230

C O N F I D E N T I A L  CARACAS 003230 
 
SIPDIS 
 
 
NSC FOR CBARTON 
USCINCSO ALSO FOR POLAD 
 
E.O. 12958: DECL: 09/10/2014 
TAGS: PREL, ETRD, VE 
SUBJECT: VENEZUELAN-RUSSIAN COOPERATION 
 
REF: IIR 69020509 
 
Classified By: Abelardo A. Arias, Political Counselor, for Reason 1.4(d 
) 
 
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Summary 
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1. (C) Venezuelan Vice-President Jose Vicente Rangel led a 
delegation to Moscow from October 2-6 for the first meeting 
of the High-Level Russo-Venezuelan Intergovernmental 
Commission (CIAN).  Rangel discussed joint efforts to combat 
international terrorism and military-technological 
cooperation with Russian Deputy Prime Minister Alexander 
Zhukov and Secretary of the Russian Security Council Igor 
Ivanov according to press reports.  The Venezuelan delegation 
also discussed energy, mining, trade, scientific and cultural 
exchanges. The joint declaration signed on October 5 was a 
general agreement, according to the Russian Embassy in 
Caracas, for future economic cooperation.  Russian Emboff 
confirmed that planning continues for a visit to Russia by 
President Hugo Chavez in November 2004.  GOV-Russia 
cooperation suits the GOV because it signals the GOV's 
ability to deal with major non-U.S. powers; to emphasize 
non-U.S. sources of military equipment; and as a signal of 
independence.  End Summary. 
 
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Economic Cooperation 
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2. (C)  Vice-President Jose Vicente Rangel led a 34-person 
delegation to Moscow from October 2-6 for the first official 
meeting of the High-Level Russo-Venezuelan Intergovernmental 
Commission (CIAN).  According to Mikhail Babich, a political 
and cultural attache at the Russian embassy, the purpose of 
this meeting was to increase economic activity between the 
two countries.  Babich said Russia and Venezuela had signed 
an agreement regarding their intentions to increase economic 
cooperation in 2001, but the political turmoil in Venezuela 
had delayed the first meeting for years.  Babich asserted 
that Chavez perceives Russians to be fellow "revolutionaries" 
and an alternative to U.S. power (with India and China), so 
interest in political engagement between the two countries is 
high. 
 
3. (C)  Russian Deputy Prime Minister Alexander Zhukov told 
reporters Russian companies were interested in greater 
cooperation with Venezuela, and that various projects existed 
that could act as engines to drive bilateral relations. 
Zhukov cited the Russian Aluminum Company (RusAl) intention 
to invest approximately $1 billion in the construction of an 
aluminum refining plant in Venezuela.  Babich confirmed that 
RusAl intended to invest at least $500 million in the 
refining plant as RusAl president and owner, Oleg Deripaska, 
told reporters.  Zhukov also asserted that Russian companies 
want to establish hydroelectric energy plants in Venezuela to 
increase cooperation. 
 
4. (C) Babich said that during the meetings, Venezuelan 
officials and Russian representatives discussed oil and gas 
cooperation.  LUKOIL and Gazprom were two companies 
specifically mentioned.  LUKOIL first vice-president, Ravil 
Maganov, told reporters he discussed a joint venture with the 
Venezuelan oil company, PDVSA, with the Venezuelan delegation 
on the basis of a memorandum of understanding signed by 
LUKOIL and PDVSA in December 2003.  According to press 
reports, Venezuela and Russia also discussed Russia's entry 
into the World Trade Organization (WTO), of which Venezuela 
is a member. 
 
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Military Cooperation 
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5. (C) Rangel and Secretary of the Russian Security Council 
Igor Ivanov discussed cooperation in military-technology and 
combating international terrorism, according to press 
reports.  DAO reported nine Venezuelan officers representing 
all the services traveled to Moscow to attend CIAN from 
October 1-10 (reftel).  A DAO source said, "It will be no 
surprise if Venezuela comes out of this intergovernmental 
commission with more equipment purchases in all services of 
 
the armed forces."  In the agreement signed on October 5, the 
mention of military cooperation was limited to "develop and 
strengthen cooperation" based on the May 2001 convention 
between the two countries. 
 
6. (C) Rangel and the Venezuelan ambassador to Russia, Carlos 
Mendoza, both confirmed that Venezuela bought Russian 
helicopters; the first 10 of which are to be delivered to 
Venezuela before the end of 2004 rather than by mid-2005 as 
previously reported.  In statements to the press, Rangel said 
the helicopter purchase for MI-17, MI-26 and MI-35 had been 
underway already and that at no time was the purpose of his 
trip to Moscow to sign arms contracts because, "Arming the 
military is the Defense Ministry's responsibility."  Babich 
could not confirm if the helicopter contract had already been 
signed, but noted that a contract for 40-50 helicopters "was 
going to happen."  Babich said he had no information about a 
contract for Russian fighter aircraft. 
 
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Future Meetings 
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7. (C)  A note from the Vice-President's office indicated 
that President Hugo Chavez would travel to Russia on November 
25-26 to sign the Cooperation Accord between the two 
countries in regards to energy, petroleum, education, 
military-technical and aerospace cooperation.  Babich 
confirmed the possibility of a Presidential visit and said 
that Russia would use the opportunity to agree on more 
specific cooperation goals rather than signing a general 
agreement as they did in the October joint declaration. 
 
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Comment 
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8. (C) Now that the recall referendum is water under the 
bridge for the GoV, it is turning its attention to external 
relations beyond the confines of the Western Hemisphere.  The 
first major foray was Foreign Minister Jesus Perez's trip to 
Iran, India and China, now followed by Vice-President 
Rangel's visit to Russia.  Talks between Russia and Venezuela 
languished during the nearly two years of pre-referendum 
political turmoil with the exception of a brief stop-over by 
then Foreign Minister Ivanov in December 2003 followed by an 
equally brief visit by Vice-President Vladimir Yakovlev in 
January 2004.  Although there appear to be a number of big 
ticket economic items on the agenda, the helicopter deal has 
garnered the most public attention, and paves the way for a 
broader military-to-military relationship between the 
countries.  The Rangel vist--and the inclusion of three 
Venezuelan Air Force generals in the delegation--will, along 
with the helo deal fuel speculation about Venezuela's 
procurement from Russia of advanced fighter aircraft.  For 
the time being only the helicopter purchase appears to be a 
reality. 
McFarland 
 
 
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      2004CARACA03230 - CONFIDENTIAL