So, with the intention of claiming billions of dollars in new revenues and reducing his country’s dependence on foreign energy, Castro has taken to the high seas in an effort to acquire and produce as much oil and gas as he can.
But there’s a rub: Cuba has neither the capacity nor the technical capability to produce this energy by itself. Castro has called in contractors from Canada, Spain, Norway — even China — to do it for him.
Babalu also posts about the Cuba/Venezuela plan to enlarge and update an old oil refinery in Cienfuegos, Cuba. Venezuelan Ambassador Adán Chávez pointed to an investment of US$800 million – US$1 billion.
The agreement entered into last Monday is a continued part of a letter of intention signed by both nations on April 28th, 2005 under the Bolivarian Alternative for the Americas (ALBA) and reinforces the ties that have united both countries since 2000 by means of the Comprehensive Cooperation Convention. In this way, Cuba has secured a supply of more than 90,000 bpd of oil and byproducts in exchange for goods and services, such as aid in social welfare programs.
According to a press release issued by Pdvsa, the purpose of the new joint venture -49 percent for Pdvsa and 51 percent for Cupet- is refining of hydrocarbons and manufacture or products; purchase, storage, processing, distribution and trade of hydrocarbons and byproducts in Cuba and abroad, and sea, river and land transportation of oil and byproducts in and out of Cuba.
Elephants in Academia’s post Oil and drugs and uranium…oh my! lists Hugo’s activities in the month of April alone, including
1. Last week Chavez summarily assumed control of the oil fields operated by the Italian ENI and French Total companies.
2. Attacking the American Ambassador both through his thugs and verbally
3. Another Venezuelan drug bust (5 tons of cocaine), this time in Mexico. Last month I posted on huge drug bust (18 tons) that went mostly ignored by the media.
4. Hugo’s interference with Nicaraguan elections by offering cut-rate oil to the cities under Sandinista control. This is not simply a propagandistic maneuver, but an actual subsidy.
The drug busts are interesting: In the Mexico bust, the cocaine was stacked in 128 black suitcases marked private in a commercial plane arriving from Venezuela. While I was appalled that last month’s French bust was ignored by the media, I was not surprised that the French are not exactly letting Hugo get away with things, especially when one considers the seizure of the French oil fields. I am pleasantly surprised that Mexico isn’t, either. Maybe Vicente Fox’s government isn’t too thrilled over Hugo’s support of Andres Manuel Lopez Obrador.
However, right now I prefer to look at a bigger picture. Please bear with me, and allow me to speculate.
Hugo needs money for financing his “Bolivarian Revolution”, i.e., his desire to control all of Latin America’s politics. For that he needs money. A huge amount of money. The drug trade is one source.
Another source, more legitimate and vastly more desirable, is oil. Hugo’s building his power base on oil money. To sustain that power, he needs weapons of all kinds. But will the power ultimately go to him?
Hugo’s been dealing with Iran very closely, from which it gets assistance in its nuclear program, and has planned not only Iran/Cuba/Venezuela war games in the Caribbean, but also to undermine the U.S. dollar. As Paxety Pages stated, Chavez’s government could be planning to provide Tehran with uranium for its nuclear program. So there’s no need to speculate on whether there are Venezuela-Iran nuclear ties — by now there’s enough reason to safely assume there are.
The question is, who’s giving the Mullahs the nuclear technology? Pakistan? Russia? China? Pakistan is a minor country with no strategic interest in the Caribbean. Russia and China, however, are two key countries, and are sending the wrong signals in the current Iranian nukes story.
The Russian economy is stagnant and its population’s declining. At the same time, Russia’s trying to monopolize natural gas distribution to the EU. China, on the other hand, has a growing economy which will need more energy at an increasing rate for the foreseeable future. Pakistan has noticed.
While Russia and China both have been aiding Iran’s nuclear program, from the Caribbean strategic point of view, China would be the one to gain the most. Ever since Jimmy Carter so kindly let go of the Panama Canal in 1977, China has been eyeing control of the Canal. In an April 22, 1998, intelligence report
an article from the Defense Intelligence Agency intelligence information service headed “Panama: China Awaits U.S. Departure” stated “Li Ka-shing, the owner of Hutchison Whampoa Lt. (HW) and Cheung Kong International holdings Ltd. (CK) is planning to take control of Panama Canal operations when the U.S. transfers it to Panama in December 99,”
Unlike USA-Venezuela relations, relations between Venezuela and China are “at their best.” Not to be outdone, Russia continues to sell weapons to Venezuela, including 33 helicopters.
Instead of a rivalry, however, the current trend appears to be increasing cooperation between China and Russia as far as restraining the power of the USA, the EU, and Japan.
While I’m not proposing any conspiracy theories, I suggest that the Hugo-Fidel tango involves a number of major players. How directly are they involved remains to be ascertained.
Questions: If all of this sinks the joint economies of the USA, the EU, and Japan, its greatest clients, will the Chinese have enough sense to realize that the end-game might not work in their best interest? And what part will the Russians continue to play?
Note: My apologies. I had to re-edit the post due to problems with cutting and pasting from my original word processor.
Update: PDVSA, which owns CITGO stations in the USA, said it was no longer obliged to be regulated by the Securities and Exchange Commission (SEC). Clearly, Hugo doesn’t want anyone to know where the money’s going. Are you still fueling up at CITGO?
Update, Friday April 14
It is significant that the drugs came via Venezuela, because the Colombian army has long alleged that Venezuela’s socialist president, Hugo Chavez, is sympathetic to the Marxist rebels.
Aleksander Boyd analyzes the news:
since the very beginning, Hugo Chavez’s commitment to the drug trade has been steadfast and open. One could call it a state policy of ensuring that US military or DEA planes could not shoot down, or chase, drug dealing activities carried out in Venezuela. Raping, yet again, the sovereignty discourse, Hugo Chavez keeps claiming that his regime does more than enough to combat and eradicate drug trade and narcoguerrillas.
Evidence, as is often the case with his ‘revolution,’ indicates that since Chavez’s arrival in power, Venezuela has become the favourite launching pad for Colombia’s drug traffickers. It is argued that +80% of the cocaine produced in neighbouring Colombia and the region enters the international markets via Venezuela, as heretofore unseen quantities have been seized in various countries.
You must read the rest of his post.
Update, Saturday April 15
Majlis Speaker Gholam-Ali Haddad-Adel:
Pointing to strategic position of Iran and Venezuela in the region, he said, “Venezuela can play a role to link Iran with Latin American states while Iran can also be a good mediator for Venezuela’s more connection with the Islamic world and the Middle East.”