CARACAS, Venezuela, Nov 8, (Agencies): President Hugo Chavez inaugurated his country’s first Venezuelan-Russian offshore natural gas project on Friday, hailing his country’s increasingly close energy cooperation with Russia as a counterweight to US imperialism. Donning hard hats, Chavez and Russian Deputy Prime Minister Igor Sechin mingled with workers from Venezuela’s government-controlled oil company and Russia’s state-run gas giant, Gazprom, as exploration began at a Gulf of Venezuela drilling platform. “Russia and Venezuela are establishing a strategic alliance,” Chavez said during a televised address from the platform. “We have freed ourselves from Yankee imperialism.” Venezuela has South America’s largest natural gas reserves, but they have remained largely untapped while the country has focused on oil production. The Gulf of Venezuela is home to 27 trillion cubic feet of gas. Gazprom won the contract to help develop two natural gas blocks in the gulf in 2005. The project is expected to start producing gas within four to five years. Chavez, a fierce critic of Washington’s foreign policy in Latin America, has scaled back ties with US energy companies – including Exxon Mobil, Chevron and ConocoPhillips – while inviting new allies such as Russia, China and Iran to help develop Venezuela’s energy reserves.

Deposit
Venezuela also has invited Russian oil companies to help develop the Orinoco River Basin, recognized as the world’s single-largest known oil deposit, potentially holding 1.2 trillion barrels of extra-heavy crude.

And Russian oil companies are considering the construction of a $6.5 billion refinery to process Venezuela’s tar-like crude. Such an investment would help Venezuela wean itself off the US refineries it now depends on to process much of its heavy oil. Cooperation between Caracas and Moscow has blossomed under Chavez. Venezuela has purchased more than $4 billion in weapons from Russia since 2005, and officials are currently negotiating the sale of tanks, armored vehicles and combat planes. Russian President Dmitry Medvedev is scheduled to visit Venezuela later this month, when Venezuelan and Russian naval fleets plan to hold joint exercises in the Caribbean Sea. From his perch at the southern tip of Louisiana, port director Ted Falgout sees green: the color of money that comes from the nation’s busiest haven of offshore drilling.

“It’s OK to have an ugly spot in your backyard,” Falgout says, “if that spot has oil coming out of it.”
From her vantage point in Santa Barbara, Calif., a city known for beautiful beaches and wealthy residents, Mayor Marty Blum recalls black: the color of more than 3 million gallons of oil that flowed from a drilling rig blowout in 1969 and covered 35 miles of coastline with a thick layer of goo. “The people of Santa Barbara don’t want any more oil drilling. That’s just pretty plain,” she says. “But everybody’s got a price, and at a certain price per gallon, we’re all going to want more drilling.”
Environmental hazard or energy bonanza: Oil and natural gas trapped beneath the USA’s ocean floor mean different things to different people. As gasoline soars beyond $4 a gallon, President Bush and his would-be Republican successor, John McCain, see a viable source of domestic production. Democrat Barack Obama and the nation’s environmentalists see a threat to pristine waters and beaches – and little help at the pump from offshore drilling.