Spotlight: Energy relations between Brazil and Venezuela

Brazilian President Luiz Inácio Lula da Silva's administration has been heavily criticized for not taking a stronger stance on Venezuela's recent elections, which most of the international community has concluded were fraudulent. 

Along with countries including Colombia and Mexico, Brazil is still waiting for President Nicolás Maduro's regime to present the official voting tallies from individual polling stations to prove his claimed victory in the election.

Other countries in the region, such as Argentina, Peru, Uruguay, Costa Rica and Panama have either outright rejected the results or voiced strong skepticism, along with the US and EU, while China and Russia have recognized his win as legitimate.  

Rather than the historical sense of alignment between Lula and the "Chavismo" left-wing movement in Venezuela that brought Maduro to power after the death of Hugo Chávez, the Brazilian foreign affairs ministry's caution reflects important geopolitical issues, such as the shared 2,200km border between the two nations and the presence of around 500,000 Venezuelans in Brazil. 

Another critical issue at play is the energy relations between both nations.

After Lula's inauguration in January 2023, Brazil and Venezuela began discussing the resumption of electricity supplies from the Guri hydroelectric plant in Venezuela to supply Roraima state in Brazil, the only one not yet integrated into the domestic power grid.

Electricity purchases were interrupted in 2019 due to operational and economic problems in Venezuela and amid tensions between former president Jair Bolsonaro and Maduro.

Brazilian energy traders Âmbar Comercializadora de Energia, Bolt Energy Comercializadora de Energia and Tradener have been authorized by the mines and energy ministry MME to import energy from Venezuela. 

In March this year, a delegation from Petrobras visited Venezuela to assess possible business opportunities in the country. 

The trip was made at the invitation of Maduro's government. Executives and technicians from the Brazilian state-run company visited oil and gas production and refining units in the Maracaibo region operated by PDVSA.

Petrobras currently has no office in Venezuela, where it has explored and produced oil both onshore and offshore.

The Brazilian oil company even negotiated PDVSA's entry as a partner in the Abreu e Lima Refinery (RNEST) project in Pernambuco, but the deal was not confirmed. 

Recently, Ricardo Savini, president of Brazilian firm Fluxus, said that that it is looking at business opportunities in Venezuela. 

Fluxus is the oil and gas subsidiary of the J&F group, which also includes Âmbar Energia. 

"The environment is complex from Venezuela's internal political perspective, but one problem they don't have is the absence of hydrocarbons," he told journalists after taking part in the S&P Global Commodity Insights Energy Forum in Rio de Janeiro. 

"They need the support of the private sector," he added.