Venezuelan oil shipments to Cuba resuming in August - Libya studying Cuba's oil refinery

CARACAS, Venezuela - Venezuela will resume oil shipments to Cuba on Aug. 1, the president of Venezuela's state-owned oil monopoly confirmed Wednesday.

Petroleos de Venezuela SA plans to renew shipments of 53,000 barrels of crude per day to Cuba, said Ali Rodriguez, a former secretary general of the Organization of Petroleum Exporting Countries.

The pact, under which Cuba buys Venezuelan oil at preferential financing terms, was suspended when Venezuelan President Hugo Chavez was ousted in an April 12-14 coup.

During Chavez's brief ouster, PDVSA officials vowed not to deliver more oil to Cuba, claiming Venezuela was giving it away. Chavez's government insists the deal is similar to others in which Venezuela helps struggling Caribbean nations.

According to PDVSA, Cuba owed dlrs 142 million when the cutoff occurred. When Chavez returned, Venezuela urged Cuba to pay, and Rodriguez said Wednesday the issue had been resolved.

Rodriguez added that Cuba and Venezuela had studied the possibility of modernizing Cuba's Cienfuegos refinery but decided the project isn't feasible. He said OPEC member Libya is conducting a similar study and that Venezuela is sharing information on Cienfuegos with Libya.

Cuba Supplies BW Technology To Libya, Syria***"So that while I'm concerned about what Cuba and its biotechnological capability may be providing other countries like Iran," Ford told a Senate Foreign Relations subcommittee last week, "I'm also concerned about their associations with countries that also have a chemical or biological warfare capability and there can be an exchange of ideas, exchange of capabilities and, again, is part of the process of showing an interest and watching very carefully what they're up to in Iran and Iraq, Syria, Libya, wherever else they may be talking to people."***

March 2002 - Oil and communism don't mix: Venezuela faces energy standoff at petroleum company*** After years of quiet complaints, the employees of Petroleos de Venezuela have begun to loudly protest the radical changes wrought by President Hugo Chavez……Lameda locked horns with the Energy Ministry on numerous issues, including the new hydrocarbons law that raises royalties and mandates that PDVSA be the controlling partner in any joint venture. Critics said these rules would stifle international investment.

Other bones of contention were the central government's demand that the company hand over $4.4 billion in dividends last year, forcing PDVSA to borrow $500 million to pay the bill; and the oil sales to Cuba, whose leader, Fidel Castro, is Chavez's longtime mentor. [· Chavez has insisted that oil sales continue to Cuba, despite an unpaid $97 million bill for past sales.]

One of the major disagreements centered on the Ministry's insistence on adhering to OPEC production cuts, but forcing PDVSA to continue producing surplus oil that has now filled every available storage facility. Although PDVSA cannot sell the oil, the catch is that it still must pay royalties for producing it to the central government, Lameda revealed after his departure. "I started warehousing" when prices were $26 per barrel, he told El Universal newspaper. "They're now $16. The barrels are worth less every day. I told the minister that I have to go out and ask for $500 million in loans while I have $300 million in the warehouse."***

MUGABE IN BID TO GET FUEL FROM VENEZUELA - VISITS WITH CASTRO*** "We know that Gaddafi is the only person who is in support of Mugabe's land reform programme which is completely destroying your country," said Corrie from Scotland. "And he is the only person who has agreed to accept your currency for fuel. But that will create a huge deficit for your future generations - that is mortgaging the country." The State media said Mugabe left for a week-long state visit to Cuba but sources within the government said he might make a surprise visit to Venezuela, a member of the Organisation of Petroleum Exporting Countries (Opec).

Venezuelan Energy and Mines Minister, Alvaro Silva Calderon, was appointed the Opec secretary-general last month. "The fuel situation is getting worse and with the Libyans reportedly turning a cold shoulder after amassing land in Zimbabwe, there is a pressing need to take the begging bowl to other oil-producing countries like Venezuela to avert the crisis," said the source. "Why would the President honestly spend a week in Cuba when he has been there before?" he said. Last week, parts of the country were hit by fuel shortages triggered by hoarding amid reports that the commodity was in short supply.***

BBC Profile Hugo Chavez - - Broken promises, politics -Fidel and Mini Fidel *** Chavez doesn't want the OAS to act as a formal mediator. The irony is not lost on us that it was the OAS that came out in support of Chavez, because he was an elected president, after the failed coup in April. Yet Chavez opposed the democracy charter when the OAS proposed it last year. Americans better take notice. Venezuela is not some rinky-dink outpost. It's in our hemisphere, and that nation supplies 15 percent of U.S. petroleum imports. What happens in Venezuela affects us very directly. Clearly, Chavez is running scared. During the Caracas march he split for Maracay, 50 miles away from the capital, to attend a ceremony at the paratrooper unit that helped return him to power in April. For now, Chavez says he will accept the OAS to help end the political crisis but not as formal mediators. The OAS needs to step up and help the Venezuelans find a peaceful way out, but if Chavez insists on remaining a Mini Fidel that can't happen.***

December 2000 - Fidel, Saddam and Hugo --An improbable but growing friendship of three military revolutionaries*** The Castro-Hussein-Chávez connection is anti-American and anti-capitalistic, but not in an ideological way. What matters to the three is domestic power built upon a base of nationalism that they believe legitimizes their policies In a way, this bizarre trio represents the rebirth, a half century later, of the kind of nationalist populism spawned by General Juan Perón in Argentina and Gamal Abdel Nasser in Egypt. Mr. Castro and Mr. Saddam gained power through armed revolutions; Mr. Chávez, a paratroopers' lieutenant colonel, was democratically elected in 1998, after serving time for trying to overthrow the government in 1992.

Mr. Chávez is the most intriguing new leader to emerge in Latin America since Mr. Castro - and he is the lynchpin between Mr. Castro and Mr. Saddam. Although Cuba had been sending doctors and health workers to Iraq for years, there had not been any major contacts between the two countries until Mr. Chávez appeared on the scene. This fall, Mr. Chávez became the first democratically elected foreign head of state to visit Iraq since the Gulf War, ostensibly to invite Mr. Saddam to a summit of the Organization of Petroleum Exporting Countries. But it also was an in-your face gesture toward the United States.

…… Iraq has the world's second-largest reserves of oil, after Saudi Arabia, which it exports legally under UN controls and smuggles out on a huge scale. Mr. Saddam is not short of cash for whatever adventure next occurs to him, and, with Mr. Chávez, he can influence the international oil supply and its prices. As for Venezuela, a main source of U.S. imported oil, Mr. Chávez has been raising his profile within OPEC, having presided in Caracas in late September over a summit of that organization. Late in November, Mr. Saddam showed on two occasions what he can do to the oil market when he briefly threatened to halt the shipping of oil, a move Mr. Chávez knew about beforehand.

The Iraqi link is one aspect of Mr. Chávez's international involvements that the United States must not underestimate, with Cuba playing a central role. Since he took office in February 1999, Mr. Chávez has proclaimed his "identification" with the Cuban revolution. He visited Havana and entertained Mr. Castro in Caracas for five days last October. Mr. Castro treated Mr. Chávez as a son, an attitude seldom displayed by the Cuban leader toward any young people. During that same visit, Mr. Chávez granted Cuba large crude-oil price discounts, as he has done selectively elsewhere in the Caribbean, and agreed to help complete building a Cuban oil refinery.

Mr. Castro is Mr. Chávez's guide in the art of gently and gradually introducing authoritarian government to Venezuela. Mr. Chávez abolished the Senate and established a unicameral Parliament whose members support him. He has a new constitution, approved by a simple majority of voters in a referendum, that grants him considerable power. To complicate matters and his relations with the United States, Mr. Chávez has been openly supporting leftist guerrilla movements in neighboring Colombia. The rebels control big swaths of Colombian territory, along with numerous coca plantations. Washington has already committed $1.3 billion, mainly in military aid, to the eradication of both guerrillas and coca plantations. This could foreshadow a big U.S. commitment in Colombia and an eventual conflict with Mr. Chávez that may interfere with the flow of oil north from Venezuela.***

Hugo Chavez - Venezuela

Blocking a new axis of evil

Constantine C. Menges

August 7, 2002
Commentary in The Washington Times

A new terrorist and nuclear weapons/ballistic missile threat may well come from an axis including Cuba's Fidel Castro, the Chavez regime in Venezuela and a newly elected radical president of Brazil, all with links to Iraq, Iran and China. Visiting Iran last year. Mr. Castro said: "Iran and Cuba can bring America to its knees," while Chavez expressed his admiration for Saddam Hussein during a visit to Iraq.

The new axis is still preventable, but if the pro-Castro candidate is elected president of Brazil, the results could include a radical regime in Brazil re-establishing its nuclear weapon and ballistic missile programs, developing close links to state sponsors of terrorism such as Cuba, Iraq and Iran, and participating in the destabilization of fragile neighboring democracies. This could lead to 300 million people in six countries coming under the control of radical anti-U.S. regimes and the possibility that thousands of newly indoctrinated terrorists might try to attack the United States from Latin America. Yet, the administration in Washington seems to be paying little attention.

Brazilians will hold presidential elections in October, and if current polling is any guide the winner could be a pro-Castro radical with extensive ties to international terrorism. His name is Luis Inacio da Silva, the presidential candidate of the Workers Party who is currently at about 40 percent in the polls. The Communist candidate is second with 25 percent and the pro-democratic contender is at about 14 percent.

Mr. da Silva makes no secret of his sympathies. He has been an ally of Mr. Castro for more than 25 years. With Mr. Castro's support, Mr.da Silva founded the Sao Paulo Forum in 1990 as an annual meeting of communist and other radical terrorist and political organizations from Latin America, Europe and the Middle East. This has been used to coordinate and plan terrorist and political activities around the world and against the United States. The last meeting was held in Havana, Cuba in December 2001. It involved terrorists from Latin America, Europe and the Middle East, and sharply condemned the Bush administration and its actions against international terrorism.

Like Mr. Castro, Mr. da Silva blames the United States and "neo-liberalism" for all the real social and economic problems still facing Brazil and Latin America. Mr. Da Silva has called the Free Trade Area of the Americas a plot by the United States to "annex" Brazil, and he has said that the international lenders who seek repayment of their $250 billion in loans are "economic terrorists." He has also said that those who are moving their money out of Brazil because they fear his regime are "economic terrorists." This gives a hint about the kind of "war against terrorism" his regime will conduct.

Brazil is a vast, richly endowed country, nearly the size of the United States with a population of about 180 million and the world's eighth largest economy (with a GDP of more than $1.1 trillion). It could soon become one of the world's nuclear armed powers as well. Between 1965 and 1994, the military actively worked to develop nuclear weapons, it successfully designed two atomic bombs and was reportedly on the verge of testing one nuclear device when a newly elected democratic government and a Brazilian congressional investigation caused the program to be shut down.

That investigation revealed, however, that the military had sold eight tons of uranium to Iraq in 1981. It is also reported that after Brazil's successful ballistic missile program was ended, the general and 24 of the scientists working on it went to work for Iraq. There are reports that with financing from Iraq, a nuclear weapons capability has been covertly maintained contrary to directives from the civilian democratic leaders.

Mr. da Silva has said Brazil should have nuclear weapons and move closer to China, which has been actively courting the Brazilian military. China has sold Brazil enriched uranium and has invested in the Brazilian aerospace industry, resulting in a joint imagery/reconnaissance satellite.

Brazil shares common borders with 10 other countries in South America. This would help da Silva to emulate - as he has said he would - the foreign policy of the pro-Castro and pro-Iraq Chavez regime in Venezuela, which has provided support to the communist narco-terrorist FARC in Colombia as well as other anti-democratic groups in other South American countries. Hugo Chavez worked with Mr. Castro to temporarily destabilize the fragile democracy in Ecuador two years ago. Now both support the radical socialist leader of the cocaine growers, Evo Morales, who hopes to become president of Bolivia this August.

Along with helping the communist guerrillas take power in the embattled democracy in Colombia, a da Silva regime in Brazil would be well situated to aide communists, narco-terrorists and other anti-democratic groups in destabilizing the fragile democracies of Bolivia, Ecuador and Peru, as well as to exploit the deep economic crisis in Argentina and Paraguay.

Further, a da Silva regime is likely to default on its debt, causing a sharp economic downturn in all of Latin America, thereby increasing the vulnerability of its democracies. This could also trigger a second phase of economic downturn in the United States as export markets contracted.

A Castro-Chavez-da Silva axis would mean linking 43 years of Fidel Castro's political warfare against the United States with the oil wealth of Venezuela and the nuclear weapons/ ballistic missile and economic potential of Brazil.

Come our own elections in November 2004, Americans may ask: Who lost South America? The United States was politically passive during the Clinton administration, when it ignored the pleas of Venezuela's democratic leaders for help in opposing the anti-constitutional and illegal actions of Mr. Chavez and also ignored his public alliances with state sponsors of terrorism. Why can't the Bush administration act before 20 years of democratic gains in Latin America were allowed to be reversed? Why can't anything be done before a vast new southern flank is opened up in the terrorist threat and our nation menaced by one more radical anti-American regime intent on acquiring nuclear weapons and ballistic missiles?

This disaster for U.S. national security and for the people of Latin America must and can be averted if our policy makers act quickly and decisively, but they must do so now. Timely political attention and actions by the United States and other democracies should include encouragement for the pro-democratic parties in Brazil to unify behind an honest, capable political leader who can represent the hopes of the majority of Brazilians for genuine democracy and who has the resources to mount an effective national campaign.

Constantine C. Menges, a senior fellow with the Hudson Institute, is a former National Security Council member.

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