On October 8, 2005, Argentine Foreign Minister Rafael Bielsa announced that Venezuela was seeking to purchase a small nuclear power reactor from Argentina.[1] The initiative has drawn attention because Venezuelan president Hugo Chavez, a strong critic of the United States, has sought to build ties to anti-U.S. nations, including Iran, a country which the United States believes is developing nuclear weapons. Argentinean officials spoke of the Venezuelan inquiry with caution, noting that discussions were at a very preliminary stage and that any sale that might be authorized would be subject strict International Atomic Energy Agency (IAEA) monitoring.

Underlying questions about the potential reactor sale was the possibility that the facility might be the first stage of a more ambitious Venezuelan nuclear program that could have ties to Iran and that, potentially, could acquire military dimensions. The prospect of Venezuelan-Iranian nuclear ties first surfaced in May 2005, when Chavez identified Iran as one of the states with which he hoped to cooperate in building Venezuela’s peaceful nuclear program.[2] On September 24 the linkage was reinforced when Venezuela was the only member of the IAEA Board of Governors to vote against a resolution finding Iran to be in noncompliance with IAEA inspection rules because of its pursuit for nearly two decades of an undeclared uranium enrichment program.[3]

The Bush Administration had limited comments about the Argentina-Venezuela reactor sale discussions, perhaps to avoid surfacing a new controversy with the latter country prior to the November 5, 2005, Summit of the Americas held in Mar del Plata, Argentina. Commenting on October 11 on the possible sale, U.S. State Department spokesman Adam Ereli said only that any transfer of a nuclear reactor to Venezuela must be made in compliance with the nuclear Nonproliferation Treaty, as Venezuela is a member state. [4] Similarly, President George W. Bush commented immediately prior to the summit that he had not heard about Venezuela’s request for help in building a reactor, but that “maybe it makes sense,” although he stressed he had not “really studied the proposal.” [5] The issue was not discussed publicly during the Mar del Plata meeting.

The Buenos Aires Clarin first broke the news about the potential reactor sale on October 9. It reported that a delegation of officials from Venezuelan Petroleum, Inc., and the Venezuelan Petroleum Technology Institute had met with the Argentine Technological Network in Buenos Aires on August 29-30, and had proposed the purchase of a medium-power nuclear reactor. [6] (The Argentine Technological Network is an association of government and private high-technology organizations, including the Argentine National Nuclear Energy Commission (CNEA)). The Venezuelan delegation stated that the reactor was needed not for electricity production, but as part of Venezuela’s planned exploitation of the country’s deposits of “extra heavy” oil in the Orinoco Oil Belt, which comprise 90 percent of the world’s known deposits of the material. Although Clarin did not provide details, a 1999 Canadian study points out that nuclear energy could provide one option for meeting the substantial energy requirements needed to support the production of crude oil from oil tar sands – similar to “extra heavy oil” – by producing steam for extraction and hydrogen for upgrading the extracted petroleum product.[7]

The Venezuelan team spoke specifically of their interest in a CAREM (Argentine Modular Elements Plant) reactor, a project on which Argentina has worked for some 20 years. However, this reactor is still in the prototype stage, and none has yet been built.[8] “Several tests still need to be performed on it next year,” according to Ruben Calabrese, the manager of the Ezeiza Atomic Center, which is in charge of the project. [9] According to information provided by the Argentine National Atomic Energy Commission, CAREM is a low-power nuclear plant (25 megawatts), with a number of potential uses ranging from “supplying electricity in isolated regions at a reasonable cost or electricity for desalinating seawater, to serving as a research and training laboratory for operators for nuclear power plants.”[10] Although the prototype CAREM unit would appear to be too small for the extra heavy oil extraction and refining mission, feasibility studies have shown that CAREM technology can be scaled up a facility with a 300 megawatt (electric) output.[11]

Argentina has previously sold nuclear research reactors, based on other designs, to Algeria, Egypt, Peru and Australia, all subject to IAEA inspection in accordance with the nuclear Nonproliferation Treaty. All of these states are members of the treaty, as is Argentina.

According to the Clarin report, a broad letter of intent to pursue a range of joint energy-related projects was signed by the Venezuelan and Argentinean participants during their late August meeting. [12] However, the piece quoted Dario Jinchuk, Director of International Affairs of the Argentine National Atomic Energy Commission, as cautioning that "a political decision by the government and a commercial contract" would be needed in order to make the sale.[13] On October 11, two days after the Argentine Foreign Ministry disclosed the discussions, Venezuelan Energy Minister Rafael Ramirez underscored that the nuclear talks with Argentina were preliminary and that “there exists no concrete agreement on the acquisition of any equipment related to the generation of nuclear energy.”[14]

In Buenos Aires, leaders of opposition parties spoke firmly against such potential transfer to Venezuela. The possibility of such a sale also divided the Argentinean federal government, pitting what Clarin characterized as the “pro-Chavez camp" (Office of the President, Planning Ministry, and some officials in the Foreign Ministry) against the "not at all pro-Chavez" camp (the Economy Ministry and a different circle in the Foreign Ministry).[15] One high-ranking official close to Argentine President Nestor Kirchner, who asked not to be identified, was quoted by Clarin as stating that Kirchner was favorably disposed to sell a reactor to Venezuela. Other officials, however, sought to discourage the initiative for fear of straining relations with the United States, among other reasons.[16]

In a recent development, Kirchner visited Venezuela on November 21, 2005, to discuss expanding economic cooperation between the two countries. As part of his entourage, Kirchner included a "handful of nuclear engineers," suggesting that discussions on nuclear cooperation between the two countries may be accelerating. [17]

SOURCES: [1] “Argentina: Foreign Minister Confirms Chavez Wants to Purchase Nuclear Reactor” [in Spanish], Buenos Aires Clarin, October 10, 2005. [FBIS document number LAP2005101021001] [2] “Venezuela to Seek Nuclear Power With Iran's Help, Chavez Says,” Bloomberg News Service, May 22, 2005. [View Article] [3] The IAEA Board adopted the resolution by a vote of 22-1, with 12 abstentions. Venezuela cast the sole negative vote. [4] “Argentina: U.S. Expects Countries to Comply with Nonproliferation Treaty” [in Spanish], Buenos Aires Clarin, October 12, 2005. [FBIS document number LAP20051012021001] [5] “Bush Open to Venezuela Nuclear Reactor,” Washington Post, November 2, 2005. See also, Steve Holland, “Bush Aide Criticizes Chavez, Venezuela Nuclear Plan,” Reuters, November 3, 2005. [6] “Argentina: Export of Sensitive Nuke Technology to Venezuela Sparks Controversy” [in Spanish], Buenos Aires Clarin, October 9, 2005, pp. 1, 3-4. [FBIS document number LAP20051009358006] [7] “Nuclear Energy in Industry: Application to Oil Production” John K. Donnelly and Duane R. Pendergast presented at Climate Change and Energy Options Symposium, Canadian Nuclear Society, Ottawa, Canada, November 17-19, 1999. [8] “Argentina: Export of Sensitive Nuke Technology,” op. cit. [9] INVAP (designer of the CAREM reactor for CNEA) website. [View Article]; (Site is also source of CAREM illustration). [10] INVAP website, op. cit. [11] INVAP website, op. cit. [12] “Argentina: Chavez’ Nuclear Interest Could Affect SOA” [in Spanish], Buenos Aires Clarin, 20 October 2005. [FBIS document number LAP20051020021001] [13] “Argentina: Export of Sensitive Nuke Technology,” op. cit. [14] Embassy of Venezuela to the United States website. [View Article]; see also “Venezuela has no plans to acquire a nuclear reactor,” India Daily, October 12, 2005. [View Article] [15] “Argentina: Export of Sensitive Nuke Technology,” op. cit. [16] “Argentina: Export of Sensitive Nuke Technology,” op. cit. [17 ]"After Lavagna, an Uncertain Tilt Toward Populism," Economist, December 3-9, 2005.