Bicycle and oil deals cement Chavez's ties to Iran

Amadinejad presented Chavez with the golden 'High Medallion of the Islamic Republic of Iran'. Picture / Reuters

TEHRAN - Venezuelan President Hugo Chavez enveloped his Iranian counterpart Mahmoud Ahmadinejad in a bear hug on Sunday and the two men backed their anti-US rhetoric with deals on everything from bicycles to oil.

In a typically verbose speech, robust ex-paratrooper Chavez lambasted their common enemy, Washington.

"If the US empire succeeds in establishing its dominance, there will be no future for humanity. Therefore we should save humanity and end the American empire," Chavez told a crowd at the University of Tehran.

Chavez also criticised the current offensive by Israel, Iran's arch-enemy, against Lebanon as "both fascism and terrorism". This chimed with the view of Iran's president who has compared Israel's conduct to that of Adolf Hitler.

A beaming Ahmadinejad presented Chavez with the golden "High Medallion of the Islamic Republic of Iran" and slipped a blue sash around his chest.

"Mr Chavez is my brother, the brother of the whole Iranian nation and of all freedom-seeking people in the world," he said.

"He is a perpetual warrior against the dominant system, a worshipper of God and a servant of the people," he added.

Chavez and Ahmadinejad are both ex-military populists who take a hawkish price stance in the Opec oil cartel. They enjoy a close personal rapport.

Both countries frequently boast they are steeled for any military assault the United States may launch.

Venezuelan Energy and Mines Minister Rafael Ramirez echoed the leaders' defiant attitude by threatening to cut oil exports to the United States if Washington did not drop its hostile stance towards Chavez's administration.

But there was more than Yankee-bashing to the visit, and the Venezuelan delegation signed several Memorandums of Understanding on joint work in the oil industry and housing.

Iran and Venezuela also signed deals on jointly making bicycles, medicines and industrial moulds, and pledged to co-operate in aviation and on environmental issues, though details on all these contracts were hazy.

Iranian Oil Minister Kazem Vaziri-Hamaneh said the Iranian firm Petropars would invest US$4 billion ($6.5 billion) in two Venezuelan energy projects.

Petropars is already certifying some tarry crude in the Orinoco Belt and is looking to develop reserves there. It also wants to supply training and services to the Norte de Paria offshore gas field.

A planned deal for Venezuela to export petrol to Iran was cancelled. Industry Minister Alireza Tahmasbi told Reuters this was because of problems over pricing and quality.

The contract had attracted considerable interest because of confusion over whether Iran is going to cut petrol imports from September 23.

Iranian investors have already poured US$1 billion of investment into Venezuela, mainly in sectors such as energy, construction and tractor-building.

Carmaker Iran Khodro said it would start making its Samand model in Venezuela in October.

Although commercial deals are proceeding, some analysts have said that Chavez's dependence on the United States as a major buyer of his oil will probably prevent him from striking any arms deals with Tehran.

Chavez visited Moscow before Iran, and on Thursday Russia said it had sold Venezuela 77 aircraft and helicopters as part of a long-term package of arms deals worth over US$3 billion.

- REUTERS