Venezuela, Iran mull gasoline deal, joint oil company

CARACAS, Venezuela, Nov. 9 (UPI) -- Venezuela and Iran are considering a wide-ranging energy cooperation deal that will give Iran a sanctions-busting option to import up to 20,000 barrels a day of gasoline from this Latin American country.

The deal has been discussed over several months already and is now slated for final consideration when Iranian President Mahmoud Ahmadinejad visits Caracas at the invitation of President Hugo Chavez, officials said. Ahmadinejad, who put off a summer visit because of elections in which he was re-elected, will now visit Caracas before the end of 2009, officials added.

The energy cooperation deal also includes discussion on setting up a joint Venezuelan-Iranian oil company with headquarters in Spain. The projected company, too, has been under consideration by the two sides for some time, but the talks were delayed because of difficulties over registration of a company with Iranian equity in it. The problem was resolved when Spain agreed to host the company's headquarters, officials said.

Venezuelan President Hugo Chavez said he wanted Ahmadinejad to be beside him when he inaugurates new housing built as part of a bilateral cooperation project.

"I want him (Ahmadinejad) to accompany me to inaugurate some houses," Chavez told the Iranian ambassador to Venezuela, Ahmad Sobhani, during a television and radio show.

Venezuela and Iran have discussed various deals that provide for Iranian investments in Venezuela. The planned gasoline exports to Iran are part of a financial deal in which Iran will repay for its imports from Venezuela by investing an equal amount in the country.

When Chavez visited Iran in September, the two governments signed more than 200 agreements for cooperation in the fields of food and health, housing, trade and uranium prospecting.

The gasoline deal was announced by Chavez during a joint news conference with Ahmadinejad in Tehran. It coincided with Western concerns over Iran's nuclear program and amid speculation that tighter U.N. sanctions on Iran may follow if there is no breakthrough in nuclear talks.

Iran has dismissed suggestions that it is worried about gasoline shortages. Mohammad Ali Katabi, Iran's governor at the Organization of Petroleum Exporting Countries, told the Fars News Agency that a number of global gas suppliers were eying the Iranian market.

"The rainy season has ended in most countries of the world and gasoline consumption will (as a result) slide to the minimum level," he said. "Thus, a large number of gasoline suppliers are vying hard with each other in a bid to sell their gasoline to Iran."

U.S. lawmakers sent a measure to President Barack Obama recently that prohibits companies selling fuel to Iran from U.S. government contracts. The measure is part of an effort to persuade Iran to step in line with the international community with its controversial nuclear program.

Iran has some of the largest oil and gas reserves in the world, but its refining has not kept pace with demand. Iran imports up to 40 percent of its fuel needs.