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The Governments of the Bolivarian Republic of Venezuela and the Republic of Bolivia;

Reaffirming the close friendship and cooperation ties that have traditionally existed between the Bolivarian Republic of Venezuela and the Republic of Bolivia;

Recognizing the need for adaptation to the changing conditions of the hydrocarbon and financial markets;

Continuing to work within the process of strengthening of the energetic integration of the ALBA member countries, and within the framework of the ALBA’s Energetic Treaty, submitted as an initiative of the Bolivarian Republic of Venezuela on the occasion of the Fifth Summit of the Bolivarian Alternative for the Peoples of America, held in Barquisimeto, Venezuela;

Ratifying the importance of consolidating a process of energetic cooperation that is based on the schemes of PETROAMERICA, PETROANDINA, PETROCARIBE AND PETROSUR, that guarantees the right of peoples to access energy resources via a system of favourable, just and equitable exchanges;

Agree to execute the “Energetic Agreement of the ALBA”, as detailed below:

First:

The Bolivarian Republic of Venezuela will directly supply crude, refined products and Liquified Petroleum Gas (LPG) to the Republic of Bolivia, to an amount of two hundred and fifty thousand (250,000) barrels per month, or its energetic equivalent. The supply will take place through a joint venture which will be formed by PDVSA and the signatory country’s state company. The supply may be evaluated and adjusted according to the turnover made by the Republic of Bolivia, the Bolivarian Republic of Venezuela’s availability, the decisions adopted by the OPEC (Organization of Countries Exporters of Oil), and any other circumstance that may force the Bolivarian Republic of Venezuela to alter the assigned quota, as specified in this Agreement.

Second:

This Agreement will exclusively apply to those public entities approved by the Bolivarian Republic of Venezuela and the Republic of Bolivia.

Third:

The supply made by the Bolivarian Republic of Venezuela to the joint venture mentioned in the first article of this Agreement will be governed by the commercial policies and practices of PDVSA, who will administer the supply in accordance with the quota established by the Government of the Bolivarian Republic of Venezuela. At the request of the National Executive, PDVSA will administer any requirement based on the quota established in this Agreement.

Fourth:

This Agreement will be based on the following financial scheme:

- Fifty per cent (50%) of the bill is to be paid for within ninety (90) days at an annual interest rate of two per cent (2%). The remaining fifty per cent (50%) will be paid within a period of twenty-three years (23), plus a grace period of two (2) years, at an annual interest rate of two per cent (2%).

- As stipulated in the first article of this Agreement, the joint venture or the relevant PDVSA subsidiary will be responsible for the payment of twenty-five per cent (25%) of the financed fifty per cent (50%). Once operational and financial costs have been deducted, the remaining amount will be assigned to the Fund of the ALBA, and dedicated to finance infrastructural works and social projects in the Republic of Bolivia.
- The remaining twenty-five per cent (25%) of the financed fifty per cent (50%) will be assumed by the Republic of Bolivia.

The joint venture mentioned in the first article of this Agreement will be invoiced on the basis of the international market’s current referential prices. The Government of the Bolivarian Republic of Venezuela reserves the right to present shipments to the port of entry, in which case the financing will only cover the product’s value (FOB-VZLA), while the cost of chartering must be paid in full.

Fifth:

Interest repayment and asset amortization related to debts contracted by the Republic of Bolivia may take place through the use of mechanisms of commercial compensation, if and when required by the Government of the Bolivarian Republic of Venezuela.

Sixth:

To the effects of this Agreement, the turnover financed by the Government of the Bolivarian Republic of Venezuela will be dedicated to Bolivia’s internal consumption. The terms of this Agreement may be revised should Bolivia start exporting crude, refined 
products or LPG.

Seventh:

Once it comes into effect, this Agreement will override any other Energetic Agreement of Cooperation that may have been signed between both countries in the past, and that may refer to the supply of crude, refined products and LPG by the Bolivarian Republic of Venezuela.

 Eighth:

The Bolivarian Republic of Venezuela will nominate the responsible and executant organizations through the National Executive. It will also nominate the mechanisms and procedures necessary for the implementation of this Agreement.

Ninth:

The present Agreement will come into force following the ratification of this instrument, through which the parties will agree to comply with the relevant constitutional and legal formalities. The Agreement will be in effect for a period of one (1) year, and may be automatically renewed for equal and consecutive periods of time, unless one of the parties  expresses the contrary, in writing, through diplomatic means and six (6) months prior to the due date of the Agreement.

The termination of the present Agreement will not affect any programs or projects that are already underway; these will be carried out to their full term unless the parties agree to the contrary.

This Agreement may be modified if the interests of the Bolivarian Republic of Venezuela require so. In this event, the Republic of Bolivia will be notified in writing, through diplomatic means, and with thirty (30) days notice.

The President of the Bolivarian Republic of Venezuela and the President of the Republic of Bolivia subscribe this Agreement on 29th April 2007.

On behalf of the Bolivarian                             On behalf of the Republic 
Republic of Venezuela                                    of Bolivia

Hugo Chavez Frias                                          Evo Morales
President of the Republic                               President

(Translated for Portal ALBA by Damaris Garzón)

Original document: http://www.alternativabolivariana.org/modules.php?name=News&file=article&sid=1804