Flashback: Oil Trade Agreement, The Moment of Diplomatic Relations Enhancement between Venezuela and South Africa

Cooperation between countries, both bilaterally and multilaterally, is a crucial step to support the progress and development of countries that cooperate with each other, especially in the field of economic cooperation. Building cooperation with developed countries is often considered more profitable in various sectors. On the other hand, cooperation between developing countries, commonly known as "South-South Cooperation", to support the development of Southern countries with each other is also an important matter. Quoted from the United Nations official website, the term “South-South Cooperation” refers to technical cooperation between developing countries to collaborate and share knowledge, skills, and successful initiatives in certain fields to support the development of certain sectors of the countries that are members of the United Nations. the cooperation.

Venezuela and South Africa are the evidence of a successful establishment of South-South Cooperation between developing countries. Cooperation between both countries began with a deal in oil trade back in 2008, when the world was hit by the global financial crisis. As developing countries struggling to survive, Venezuela and South Africa have taken the initiative to build cooperation in the trade sector. Venezuela with its superior oil potential and South Africa’s potential in natural gas offer each other their potential resources and rely on each other in cooperation agreements. Furthermore, this article will discuss thoroughly about the beginning of decently-maintained relations between Venezuela and South Africa through cooperation between countries that has continued until this present day.

Oil Trade Agreement, Circa 2008

Venezuela and South Africa signed a cooperation agreement as a form of alliance from both countries back in 2008. In the bilateral cooperation plan, the two countries agreed to manage the oil and gas stored under the surface of the Orinoco river valley that crosses the Venezuelan territory. As reported by The Economic Times, the President of Venezuela in that period, Hugo Chavez, openly invited South African oil companies to come directly to Venezuela and start cooperation as soon as possible. In this partnership, the South African Oil and Gas company, or PetroSA, works closely with Petroleos de Venezuela SA (PdVSA) on Venezuelan soil.

In return, the President of South Africa on duty, Thabo Mbeki, invited Venezuela to explore the country's natural gas resources. South Africa is also a pioneer in the technology of converting natural gas into liquids, with a stock storage capacity of 45 million barrels. This draws Venezuela’s interest in planning further collaborations with the country. The main objective of establishing bilateral cooperation in the economic field of the two countries is to help reduce the costs incurred for importing oil and natural gas and take the initiative to 'barter' for the resources needed by each country.

The moment of economic cooperation between Venezuela and South Africa marked the beginning of the close relationship between the two. As recorded in the transcript of the press conference between Venezuela and South Africa on September 2, 2008, regarding the establishment of bilateral cooperation in the economic field, President Mbeki called their cooperation a 'strategic partnership' which means that the two countries will learn from each other and take advantage of each other's strengths and weaknesses. This collaboration is expected to have a positive impact on the people of the two countries and support development.

Enhancing the Relations, for the Present and the Future

Although diplomatic relations between Venezuela and South Africa have been running since 1993 when embassies in each country were deployed, the agreement on oil and gas commodities in 2008 was a big milestone for the two countries to strengthen their good relations. Since the 2008 cooperation in the oil trade sector, which is mutually beneficial to both parties, Venezuela and South Africa have continued to intensively build cooperation in various other sectors.

One of the cooperations between the two countries that was established after the success of the oil trade cooperation in 2008 was the diamond mining product trade cooperation in July 2017. As reported from The Diamond Loupe, the cooperation contract was signed by the Deputy Minister of Mineral Resources of South Africa, Godfrey Oliphant, and his Venezuelan associate, Víctor Cano. Still, in the natural resource trade sector, another example of Venezuelan - South African cooperation is the massive export of 200 tons of coffee to coffee products manufacturing companies in South Africa in 2020. Not only in the natural resource trade sector, Venezuela and South Africa also worked together in dealing with the COVID-19 pandemic at the beginning of its spread in 2020 ago by sharing an analysis of the evolution of the COVID-19 virus as a reference for building policies in dealing with the pandemic. Even in 2019 when Venezuela was facing a massive political and financial crisis, South Africa helped Venezuela by urging the UN Security Council to step in to help Venezuela return to normalcy.

As quoted from the official DIRCO website, South Africa will continue to forge strong brotherly relations with Venezuela. Venezuela remains South Africa's strategic partner in Latin America, especially in the context of South-South Cooperation and the potential for future economic partnerships considering its abundant oil and gas reserves. The latest development, to strengthen bilateral cooperation between the two countries, Venezuela and South Africa held a meeting to discuss cooperation agreements in September 2021. According to the Venezuelan government's official website, the two sides held a meeting to review the bilateral cooperation agenda and discuss the international geopolitical landscape. During the meeting, the two countries emphasized that they would continue to strengthen their brotherly ties and bilateral cooperation.

Various cooperation agreements related to trade in mining materials such as oil and gas are the main factors behind the resilience of diplomatic relations between the two developing countries. Cooperation in the oil and gas trade sector opens the door to opportunities for both countries to build cooperation in the field of trade in other commodities as well as cooperation in various fields such as security and health. Venezuela and South Africa have proven to have solid cooperation as developing countries that need each other. This cooperative relationship between Venezuela and South Africa can be used as an example for other developing countries to build long-lasting cooperative relationships. With various efforts that have been made, good relations between Venezuela and South Africa are expected to continue in the future and be able to improve the development of each country.