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The agreement between Venezuela & Cuba

By Aleksander Boyd

London 15.12.04 | Fidel Castro and Hugo Chavez agreed to enhance areas of cooperation ranging from the economy to health and literacy programmes. Up to that point the accord is fine and dandy. However I was surprised by a one of the proposals made by Castro, namely:

5to: El precio del petróleo exportado por Venezuela a Cuba será fijado sobre la base de los precios del mercado internacional, según lo estipulado en el actual Acuerdo de Caracas vigente entre ambos países. No obstante, teniendo en cuenta la tradicional volatilidad de los precios del petróleo, que en ocasiones han hecho caer el precio del petróleo venezolano por debajo de 12 dólares el barril, Cuba ofrece a Venezuela un precio de garantía no inferior a 27 dólares por barril, siempre de conformidad con los compromisos asumidos por Venezuela dentro de la Organización de Países Exportadores de Petróleo.

Meaning that from now on Castro guarantees to pay Chavez a price of no less than $27 a barrel, in accordance to the commitments subscribed by Venezuela at the OPEC. I would like to throw in some numbers before anything else:

Chavez 'sales' Castro 53.000 BPD (official figures, barrels per day)

53.000 x $27 = $1.431.000 that Castro has to pay per day to Chavez

$1.431.000 x 30 (days/month) = $42.930.000

$42.930.000 x 12 (months) = $515.160.000

$515.160.000 x 1.920 (Bolivares/US$)= A huge number...

Note: Castro's debt to Chavez mounts already to more than $1 billion. Realistically speaking, what chances are that these monies be paid?

Are Cuba literacy and health programmes a tad bit expensive or is it just me? Has the National Assembly in Venezuela approved this 'accord'? What's the start date of payments applicable under the new accord? Purportedly the ever magnanimous Chavez even pays a couple of hundred bucks to the 'Cuban doctors' working in the slums. Multiply that for the thousands of doctors, add it to the figures above and one gets the most expensive health programme ever to be implemented in Venezuela!! Mind you, the disenfranchised of Venezuela should have the best health indicators and life expectancy levels of the planet.

What does exactly mean "...in accordance to the commitments subscribed by Venezuela at the OPEC"? Could it be that the payment of these funds is pegged to the decisions of the OPEC? Would it be wild to think that since PDVSA has no way of meeting the output quotas assigned by the cartel, the price of $27 per barrel is conditional to be paid on surplus only should the quotas be met? Considering that the appointment of new CEO of PDVSA is illegal, to whom should shareholders like myself address complaints in this respect? What really angers me is that the failed coupster disposes of the country's resources as if these belonged to him and him only.

The accord is nothing but a farce between two dictators which will bring not benefits to either of the country's citizens but to the few crooks in the inner circles of power who will most certainly capitalize from it.

Castro owes me money for that oil belongs to me as well, remember the socialist mantra, "Now PDVSA belongs to the people?"



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