Changes in the government following the death of President Hugo Chavez may lead to negative consequences for Russia's energy and other projects in Venezuela. Before going to Cuba for treatment, Chavez announced that Vice President Nicolas Maduro should inherit his power. Maduro is considered even more leftist than Chavez and could potentially keep to the same political tendencies. However, he is lacking the popularity that Chavez had. While the opposition in the country is quite organized, the system is volatile. In-fighting between the supporters of the existing system and the opposition will make the situation in the country even more unstable, which would mean uncertainty for the Russian companies doing business in Venezuela. If the opposition comes to power, Russia could lose all the contracts and agreements signed with the government of Chavez. Russian investors could be simply shown the door, something that previously happened to the U.S. investors.
There are many significant projects that Russia is developing in Venezuela. Among them is the Junin-6 field in the Orinoco Oil Belt, where commercial production has already started. The total investment in the project is evaluated at $20 billion. Additionally, Rosneft has signed documents agreeing to participate in several projects on the shelf of Venezuela, including natural gas development projects. There are also agreements to develop hydroelectric projects and nuclear energy projects. All this is in addition to the defense cooperation between Russia and Venezuela. In 2011, Venezuela became the largest importer of Russian arms for ground forces, according to the Moscow based Center for Analysis of World Arms Trade. In 2012, Venezuela became the second largest purchaser of Russian arms, after India. The value of arms acquired by Caracas from the Russian defense industry was estimated at $4.4 billion.
The main worry is that the work of the Russian oil companies will slow down due to bureaucratic red tape, which will really complicate Russia's position in Venezuela. Since Russia has no history of defending its investments using its military power, the new government may feel tempted to temper with Russia's investments. However, Russian political and energy experts believe that political chaos at this stage is unlikely. Russia is also hoping that its investments may be safe due to the traditional mistrust of the U.S. politics by Venezuela, which is expected to persist. Either way, things will become more clear only after the new President is elected.