Venezuela and Peru took a further step towards strengthening bilateral relations last Saturday when the two nations entered into ten new agreements during President Ollanta Humala’s visit to city of Puerto Ordaz in the central state of Bolivar. Energy cooperation and a memorandum of understanding addressing joint hydrocarbon exploitation in Venezuela’s Orinoco River belt - site of the largest oil reserves in the world - topped the agenda last weekend as the two heads of state met for the second time since Humala won Peru’s presidential elections in June of last year.

“From today on, we have a new business partner in the [Orinoco] belt: Petro-Peru”, Venezuelan President Hugo Chavez told the press after a helicopter tour over parts of the oil-rich zone.

Although details of the planned collaboration with Peru’s state owned oil company must still be worked out, the move highlights the Venezuelan government’s intentions to bring in international partners to develop the production of the country’s massive reserves.

The Venezuelan state through its own company, PDVSA, has planned to invest $5 billion in the Orinoco Belt in 2012 in order to boost output in the zone from 1 million barrels daily to 1.5 million. The government has also entered into agreements with other international allies over the years such as Russia and China in its attempts to accelerate extraction of the heavy crude found in the Orinoco sands.

For President Humala, the agreement to work with Venezuela is a welcomed sign of growing unity between the two South American countries as they find common ground in shared economic and social development projects.

“We want to strengthen integration in the areas of oil and hydrocarbons with companies such as PDVSA and Petro-Peru because we believe that there’s a tremendous future in this that can benefit both countries”, the Peruvian head of state said on Saturday.

Independent of the Orinoco Belt, President Chavez addressed the ability of PDVSA to aid further development of Peru’s domestic oil industry as well.

“We want to assist in raising production in mature fields. We have a little bit of experience with this, especially with heavy and extra-heavy crude production. Peru’s oil production needs to increase so that the country can become sustainable in this respect”, he said.

Fighting Poverty

Apart from energy pacts, the two presidents also signed agreements spelling out terms of cooperation in the fight against poverty as well as disaster prevention and student exchanges.

Last October, the Chavez and Humala administrations resolved to extend preferential tariffs between their countries for three months as the two nations conceived a new trade mechanism to replace that of the Andean Community of Nations, a commercial bloc from which Venezuela departed in 2006.

On Saturday, the question of trade was once again taken up, leading to an agreement to maintain preferential tariffs between the two South American nations.

“I am pleased to say that we have a positive message of confidence for all the Venezuelans and Peruvians who are working and exporting products to Peru or Venezuela. Today we are providing you with calmness and a horizon for expansion so that we continue to working towards bilateral commerce”, Humala said.

For his part, President Chavez expressed his contentment to foster strong relations with his South American partner and assured his country’s support for Peru’s continued development.

“We are at your service. We say this modestly, but we are here to assist with these great ideas that President Humala has. And we can help Peru eradicate poverty, as we are doing here in Venezuela”, he stated.