Venezuela strikes £500m deal to buy Russian submarines*

· Fleet would help Chávez thwart future US embargo · Sale to worsen
relations between Putin and Bush

Luke Harding in Moscow
Thursday June 14, 2007
Guardian Unlimited

President Hugo Chávez is poised to buy at least five submarines from
Russia in a £500m deal that will alarm the White House and confirms
Venezuela as a growing military power in the region.

Mr Chávez is expected to sign the deal during a trip to Moscow next
week. According to the Kommersant newspaper, Venezuela has agreed an
initial contract to buy five Project 636 diesel submarines, and four
Project 637 Amur submarines at a later date.

Mr Chávez wants to use the submarines to thwart any possible future
trade embargo by the US and to defend its oil-rich underwater shelf, the
paper reported.

Last year, he bought 24 Russian Sukhoi-30 two-seater attack aircraft, 34
helicopters and 100,000 Kalashnikovs. The deal was reputedly worth £1.9bn.

Venezuela - which has a defence pact with Cuba - is now the world's
second largest purchaser of Russian military hardware after Algeria. If
the full submarine deal goes ahead, Venezuela will have the largest
submarine fleet in Latin America.

Military experts said today that the diesel-powered submarines sold by
Russia to Venezuela were no match for the US's nuclear fleet, and were
based on a model used by the Germans during the second world war.

Pavel Felgenhauer, an independent military analyst, said: "In the
submarine world, it's the equivalent of a Lada. It's non-nuclear, runs
on diesel-electric, and has a snorkel. Russia simply doesn't have the
technology to produce modern torpedoes."

But, he said, they did still pose a serious threat. "There are clearly a
lot of sweeteners involved in this," he added. "A lot of people get
rich, including Mr Chávez. And it annoys the US. It's a win-win situation."

Mr Chávez's planned visit to Moscow comes days before president Vladimir
Putin heads to the US for talks with George Bush in Kennebunkport, Maine.

US-Russian relations have already plunged to what is broadly seen as the
lowest point since the cold war, strained by Moscow's anger over US
missile defence plans in Europe, and Washington's concerns about Mr
Putin's backsliding on democracy and Russia's bullying of its
post-Soviet neighbours.

Any submarine deal that would modernise Venezuela's capability, allowing
it to threaten the US navy, would not get a warm response from the
Pentagon. The US objected strongly to a deal in which Spain sold £890m
of ships and aircraft to Venezuela in 2005.

Russia earlier supplied five similar submarines to China under a
contract estimated to be worth £900m. Moscow has also angered the US by
selling weapons to Syria and Iran.

Today, Russian defence officials confirmed that negotiations with
Venezuela were at an advanced stage.

"Russian shipbuilders have offered the Amur submarine to Venezuela," a
defence industry source told the news agency, Interfax, adding that a
deal for three subs costing $600m-plus could be signed later this month
during Mr Chávez's trip.