FACTBOX-Key political risks to watch in Venezuela

By Daniel Wallis

CARACAS, Sept 2 (Reuters) - The uncertain pace of President Hugo Chavez's recovery from cancer, falling oil output that could slow an economic recovery and rising tensions ahead of next year's presidential election are the main risks to watch in Venezuela.

CHAVEZ'S CANCER

The 57-year-old socialist leader underwent a third session of chemotherapy in late August, but this time decided to have the treatment at a military hospital in Caracas.

He had traveled to Cuba for surgery and two previous rounds of chemotherapy, so the decision to stay in Venezuela is being interpreted as a sign he feels optimistic about the pace of his recovery. It also avoids giving more ammunition to the opposition, which had accused him of putting national security at risk by governing from a hospital bed in Havana.

The former soldier certainly appeared more healthy in August, hosting several hours-long televised cabinet meetings to launch government projects in infrastructure, agriculture and farming. Such populist plans will be at the center of his campaign as he seeks a new six-year term at the 2012 election.

But there are still few firm details about his condition. Chavez says all his recent medical tests have been positive, and that his doctors have not found any malignant cells. But he has not said what kind of cancer he is suffering from, so it is hard to know the likelihood of remission.

With about 50 percent support in opinion polls after 12 years in office, Chavez stands a good chance of being re-elected at next year's polls if he can beat the illness.

The panorama changes if his health deteriorates, since he has no obvious successor in his ruling Socialist Party. Wall Street investors have pushed Venezuelan bond prices higher as they consider the possibility of a more market-friendly replacement for the tough socialist.