Spain and Venezuela say relations back on track

July 26th, 2008 - 4:56 pm ICT by IANS  

Madrid, July 26 (IANS) Leaders of Spain and Venezuela have said their strained bilateral relations are back on the rails and the two nations plan to sign an accord on cooperation in energy sector, Spanish news agency EFE reported Saturday. Spanish Prime Minister Jose Luis Rodriguez Zapatero and Venezuelan President Hugo Chavez told reporters here Friday that the two countries would deepen their economic cooperation.

Chavez insisted that Spanish oil giant Repsol YPF should participate in projects in the Orinoco Belt, which holds some of the world’s largest oil reserves.

During a joint press conference after the two briefly met at the Moncloa Palace, Zapatero said he was satisfied with the “reunion” between the two countries.

Relations between Spain and Venezuela had been frosty since last November, when King Juan Carlos, exasperated by Chavez’s attacks on former Spanish premier Jose Maira Aznar at the Ibero-American summit, shouted at the Venezuelan president: “Why don’t you shut up.”

Chavez said after the incident in Santiago that he was “freezing relations with Spain” until the king apologized.

Spanish company Repsol YPF is working at one of the fields in the Orinoco and expressed interest in bidding on a second field, Chavez said.

Working with Venezuelan state-owned oil giant PDVSA, Repsol could produce “200,000 barrels daily that could go directly to Spain, which would have its oil guaranteed forever,” he said.

The Spanish prime minister said he hoped bilateral relations would focus on cooperation and noted Spain’s need for oil and other energy products.

Zapatero and Chavez agreed to a deal under which Venezuela will sell Spain 10,000 barrels per day (bpd) of crude at $100 per barrel in exchange for investment and technology, Spanish government sources told EFE.

A working group led by Spanish Industry Minister Miguel Sebastian and Venezuelan Energy Minister Rafael Ramirez will oversee the creation of a fund seeded with the revenue from the oil sales that would be used to finance technology, medical equipment and infrastructure projects in Venezuela, sources said.

Earlier in the day, Chavez met with King Juan Carlos in the Mediterranean island of Mallorca, where the two men greeted each other warmly at their first encounter since the Ibero-American Summit.

Chavez arrived at the Marivent Palace, the Spanish Royal Family’s summer residence in Palma de Mallorca, shortly before 11:30 a.m., an hour later than scheduled, to meet with the king.

The two men greeted each other for several minutes in a relaxed atmosphere, with Juan Carlos thanking Chavez for travelling to Mallorca, which is in the Balearic Islands.

“Why don’t we go to the beach?” Chavez asked after noting how hot it was and saying the Mediterranean island reminded him of Jamaica, Cuba and Venezuela’s Margarita Island.

The king welcomed Chavez outside the palace, and both men shook hands and patted each other on the back before posing for photographers.

King Juan Carlos and the Venezuelan leader met for an hour, accompanied by Spanish Foreign Minister Miguel Angel Moratinos, Venezuelan Foreign Minister Nicolas Maduro and the South American nation’s energy minister, Rafael Merino.

The king gave Chavez a t-shirt that bore the famous phrase “Why don’t you shut up” that soured relations in the first place.

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