He's one of Ahmadinajad's homies. I wonder how the U.S. will react if he dies. Venezuela got that oil too...
President Hugo Chavez, right, and Cuban President Fidel Castro attend
the Petrocaribe conference in Puerto La Cruz, Venezuela, on June 29,
2005. Photographer: Juan Carlos Hernandez/Bloomberg
Chavez Cancer Imperils $7 Billion Caribbean Oil Funding: Energy
By Anatoly Kurmanaev on January 02, 2013
Venezuelan President Hugo Chavez’s
battle with cancer threatens $7 billion of subsidized oil
exports that help prop up Cuba’s economy and contain inflation
in Caribbean nations from Jamaica to the Bahamas.
Chavez, hospitalized in Havana after a fourth operation,
sent Cuba $3.6 billion of oil in 2011 through the Petrocaribe
program that serves 70 million people across Central America and
the Caribbean. Cuba failed to make discoveries in the first
offshore drilling effort since 2004 as Repsol SA, Petroliam
Nasional Bhd. and Petroleos de Venezuela SA reported dry wells.
While Chavez’s avowed “political father” Fidel Castro
used guns and medicine to spread his socialist revolution
abroad, the Venezuelan leader relies on the world’s biggest oil
reserves. If Chavez’s successor ends the funding, Caribbean
economies still struggling to bolster tourism after the 2008
financial crisis would face further budgetary strains.
“Everyone loves Chavez here,” Salvador Rivas, head of
unconventional energy at the Dominican Republic Trade and
Industry Ministry, said by telephone Dec. 21. “We are trying to
buy more and more Venezuelan oil because terms are very good.”
The 58-year-old former paratrooper, who suffered renewed
complications from a respiratory infection following surgery
last month, created Petrocaribe in 2005. The alliance’s
members can buy oil from state-owned Petroleos de Venezuela, or
PDVSA, at market prices, paying as little as 5 percent upfront
and the remainder over 25 years at 1 percent interest rate.
U.S. aid to the entire Western Hemisphere represents about
a third of annual Petrocaribe sales, according to Washington’s
Congressional Research Committee.
Membership spans the political spectrum with only Cuba and
Nicaragua governed by Chavez’s close allies. Oil producers
Trinidad and Tobago and Barbados were the only Caribbean
countries to reject PDVSA’s offer of preferential supplies.
Most Petrocaribe members have chosen to take the oil
without joining Chavez’s self-styled Bolivarian revolution,
which has included the expropriation of more than 1,000
companies since he took office in 1999. Cheap financing has
softened the blow of near $100-a-barrel crude for the island
region, which spends 13 percent of its gross domestic product on
oil imports, according to the World Bank.
“President Chavez’s health is a very large concern for
us,” Dominican Republic Economy Minister Temistocles Montas
said in a Dec. 4 interview. “The state of his health could
affect the Petrocaribe agreement.”
Montas said Petrocaribe finances about 30,000 barrels per
day in the Dominican Republic, a U.S. political ally with a
quarter of the Caribbean population.
Petrocaribe is much more about economics than ideology,
Daniel Sachs, an analyst at London-based Control Risks, said by
telephone Dec. 21. “These countries are concerned with getting
the best possible price and not necessarily with socialist
solidarity,” he said.
In Nicaragua, governed by former guerilla Daniel Ortega,
Venezuela’s oil and aid program totaled $609 million in 2011
while Petrocaribe members Jamaica and the Lesser Antilles use
oil to generate about 95 percent of their electricity. The
leaders of Haiti, Nicaragua and Panama joined Fidel and his
brother Raul Castro in wishing Chavez a speedy recovery.
“Left to the marketplace these countries would find
themselves in a difficult economic situation,” Roger Tissot,
managing director of Tissot Associates, said yesterday by
telephone from Vernon, British Columbia. Eventually Petrocaribe
members probably would seek preferential arrangements with
regional exporters such as Mexico and Colombia, he said.
Chavez’s latest surgery was followed by a respiratory
infection, leading Venezuelan officials to open the door to
delaying a Jan. 10 inauguration of his next term and feeding
speculation of new elections if he doesn’t return in time.
For now Petrocaribe contracts are secure. Chavez beat
Henrique Capriles in October’s presidential election by more
than 10 percentage points and Vice President Nicolas Maduro has
vowed to continue Chavez’s policies. Chavez said Dec. 8 that
voters should elect Maduro to protect his legacy if his illness
prevents him from remaining in office.
Even if the opposition wins a new election, Petrocaribe
won’t be disbanded entirely, said Ronald Balza, oil policy
coordinator at the Democratic Unity Table alliance. “We will
revise the contracts to make sure they are profitable rather
than political,” Balza said by phone yesterday.
PDVSA press officer Alfredo Carquez didn’t return calls or
e-mails seeking comment. Petrocaribe marketing manager Ramon
Herrera didn’t answer calls to his mobile telephone.
Chavez’s withdrawal may accelerate changes in Cuba, said
Peter Hakim, president emeritus of the Washington-based Inter-
American Dialogue policy group, said by telephone Dec. 18.
“If the Venezuelan funding dries up, Castro is going to
have to speed up the pace of reform, allowing the economy to
open up much sooner than he expected,” said Hakim.
Venezuela accounted for 41 percent of Cuba’s foreign
trade in 2011, or $8 billion, four times more than China,
according to the Office of National Statistics in Havana.
The island nation produces about 55,000 barrels of oil a
day from Soviet-developed fields on the northern coast.
Russia’s OAO Zarubezhneft, the only foreign operator drilling in
Cuba, expects to release results in April.
Cubans are bracing for another “special period,” the name
given to the economic crisis that followed the collapse of the
Soviet Union in 1991, Hugo Luis Sanchez, a Cuban novelist and
commentator, said by telephone from Havana Dec. 18.
“Everyone in Cuba understands things will become very
serious if Chavez goes,” he said. “He has given us a measure
of stability for a time.”