Venezuela under Hugo Chavez is striving hard to forge a course — largely independent of the US and Western oil majors. Chavez was the first leader of the oil rich South American country — fifth largest in the world — who after coming into power in 1999, started to forge strategic relations with the oil-producing states of the Gulf. His high-profile visit to Riyadh after assuming power was a major coup, as far as the energy world was concerned.

In 2000, only after one year of coming into power in Caracas, he hosted an OPEC presidential summit, only the second in 40-year history of the oil cartel, giving a call for much closer economic cooperation between member countries. It is, however, no secret that Chavez’s efforts to improve relations with the oil-producing Gulf countries have never been looked at favorably in Washington.

In fact, this policy earned him the wrath of the United States, which went to the extent of supporting the short-lived coup in Caracas in 2003. As a result of the coup, Chavez was overthrown; in a few days, however, he was back in power. Despite this estrangement, the US is still the largest buyer of the Venezuelan crude. Sixty percent of the country’s crude exports goes to the United States. Chavez wants now to change the equation. He wants less dependence on Washington. He is working to expand the market base for his major cash earning product crude. Chavez also envisions a “multipolar” world free of US political, economic and military dominance. In order to achieve this, late last year he traveled to Iran, Russia, Qatar, Libya and China to expand energy relations.

When he visited China last December, the second largest oil consumer after the United States, Chavez announced giving access to 15 oil producing areas to Chinese companies. Chinese oil companies were also invited to explore for oil off Venezuela’s northern coast and to set up oil refineries along its Orinoco River. The deals signed then in Beijing gave Chinese firms the right to produce gas in Venezuela as well. During the visit, Chavez also discussed plans to build a pipeline across the Colombian Andes to Panama to export crude to China.

Venezuela is also stepping up campaign to strike deals with the Gulf-based state-run oil companies. A 15-member delegation from the Iranian Oil Ministry was in the country, looking for opportunities in the natural gas and petrochemicals industry. This week a Venezuelan delegation is traveling to Qatar for more talks on natural gas. “We want to formalize joint projects, for example in the (natural) gas field with Qatar we are very advanced, and now we are beginning conversations with Iran,” Venezuelan Oil Minister Rafael Ramirez said last week.

As per reports, major differences have cropped up between the Texas based oil major ConocoPhillips and the Venezuelan state oil company Petroleos de Venezuela (PdVSA) over a plan to develop the Corocoro oil field off the eastern coast of the country. Venezuelan officials attribute the dispute to changes in ConocoPhillips’ business plan for the area but other reports say Venezuela is pressing ConocoPhilips to buy more locally produced supplies, a request the company soundly rejects.

Similarly the Royal Dutch/Shell Group has also failed to get a $2.7 billion offshore natural gas project, known as Mariscal Sucre, off the ground due to a standoff over who will control the project. The Venezuelan government is insisting on a majority stake in the venture, but industry sources say the Netherlands-controlled company is unwilling to forego a lead position. These issues and the non-compliance by the oil majors to comply with its requests are also compelling Venezuela to actively start pursuing alliances other than with the long present oil majors. Hence the current Venezuelan rush to the East is understandable in many ways.