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Chavez, Lula talk cooperation but send mixed signals

Venezuelan President Hugo Chavez said his government is prepared to provide billions of dollars to help build a Brazilian refinery that will process Venezuelan crude when it starts operating in 2010.

But after he met for hours on Wednesday with Brazilian President Luiz Inacio Lula da Silva, plans by the two nations for expanded energy cooperation -- with the refinery as an example -- seemed nebulous at best.

Reporters were called to a news conference for a joint declaration by the two leaders to outline their energy plans, only to be told later that they would not make a statement until yesterday.

Then the state-run oil companies of Brazil and Venezuela released details of an agreement on the refinery that only vaguely outlined such specifics as ownership and operation.

Brazil's Agencia Estado news service quoted an executive with state-run oil company Petrobras predicting it would take at least two months to sign a contract.

Chavez put the potential amount of Venezuelan investment in the refinery at US$4 billion.

But his declaration of that amount was confusing because Brazilian authorities have said the facility will cost US$4.05 billion to build with a majority of the capital provided by Petrobras, which has already started construction.

Chavez did not elaborate while speaking with reporters at the airport in Recife before heading on a tour of the refinery construction site with Lula.

Brazil's Foreign Ministry could not immediately provide clarification, and Petrobras officials at the site of the meeting between Lula and Chavez provided no details.

Chavez and Lula three years ago laid the cornerstone for the refinery, which was originally to be funded 60 percent by Petroleo Brasileiro, and 40 percent by Petroleos de Venezuela.

But negotiations stalled over joint construction and operation, and last year Petrobras started to build the facility on its own without any Venezuelan capital.

The refinery is expected to process 200,000 barrels of oil daily initially, with half coming from Venezuela and half from Brazil. Daily capacity could eventually rise to 400,000 barrels, officials said.
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