What will Russia do without Venezuela?

A possible change of government in Venezuela after the death of President Hugo Chavez may lead to dramatic consequences. In this case, the position of Russian companies working in the country will become very risky, and the implementation of joint contracts may thus fail.

Photo: AP photo

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Before going to Cuba for treatment, Chavez announced the name of the person he considers worthy of taking the office - Vice President Nicolas Maduro.

Should Maduro, who is more leftist than Chavez, come to power, nothing special would follow, deputy director of the Institute of Latin American of the Russian Academy of Sciences, Vladimir Sudarev believes. "Both the opposition and Chavez supporters are aggressive towards each other, so a compromise is unlikely," he added.

In a country, where opposition is quite competitive, opposition forces have all chances to come to power in the absence of popularity of the leader and unstable system, the head of the National Energy Security Fund, Konstantin Simonov said.

General Director of the National Energy Institute, Sergei Pravosudov, believes that the struggle between supporters of the anti-American position of Chavez and his opponents is very likely to continue. "Russian companies will have to experience all the nuances of the struggle, which, at worst, could develop into a civil war," he said.

The future of Russian companies doing business in Venezuela, and the future of Venezuelan contracts remains uncertain, experts say. It is highly likely that the new government of Venezuela will ask Russian investors out, just like Chavez did to U.S. investors, without any compensations, Konstantin Simonov believes. In this case, Russia will have to say good-bye to the bonuses that our companies paid for the right to invest in Venezuela. 

Vladimir Sudarev is sure that Russian companies will not be shown the door. Most likely, the expert believes, the new Venezuelan authorities "will get rid of them in a more intelligent way - they simply will not let them work." In any case, without Chavez, Russian investors will have a hard time, in Venezuela.

Russia is very limited in its opportunities to protect its investments in Venezuela. "The Anglo-Saxons, with their extensive network of oil companies around the world, in such cases, do their best to defend the politicians, with whom they concluded this or that agreement. They use money, media campaigns, and if all that doesn't work, aircraft carriers appear near the shores of the stubborn nation," explains the expert.

"It is unlikely that Russia will go for it - he continues. - In practice, Russia can show an influence on the situation only if veto resolutions are adopted in international organizations."

Chavez was consistently pursuing the policy of building friendship with Russia. During the recent years, Caracas has become one of the most important strategic partners of Moscow on the Latin American continent. 

First of all, it goes about the development of Junin-6 field in the Orinoco Oil Belt, where commercial production has already started. The total investment in the project is evaluated at $20 billion. All Russian companies take part in five projects for the extraction of oil in Venezuela.

Russian oil company Rosneft signed documents on the possible participation in a number of projects on the shelf of Venezuela, including natural gas projects, as well as memorandums of understanding. Agreements in the field of hydropower were also signed. The head of the state-owned company, Igor Sechin, who visited the country at the end of December, said that Russian investments were protected and projects would be implemented in a long term perspective.

Defense cooperation between Russia and Venezuela takes a special place. As predicted by the Center for the Analysis of World Arms Trade, Venezuela is to be ranked second in Russia's arms exports in 2012-2015, following India, with the purchasing volume of $3.2 billion.