CUBA: Havana Has Paid ‘Every Cent’ of Venezuelan Oil, says Gov’t

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, May 30 2002 (IPS) - The Cuban government said Thursday that it has paid “every cent” of the oil it imported from Venezuela, and that the April suspension of shipments has cost this Caribbean island nation tens of millions of dollars in additional expenses.

There is one payment “that falls due between Apr 11 and Jun 30,” and which according to sources in Venezuela is apparently the reason that the shipments – which form part of an oil agreement signed by the two countries in October 2000 – were cut off.

A communique released by the Cuban government said the pending payment was the focus of negotiations between Petróleos de Venezuela S.A. (PDVSA), that country’s state oil monopoly, and Unión Cuba-Petróleo (CUPET), Cuba’s oil company, “which at all times has expressed the intention of Cuban authorities to meet their obligations.”

The back-and-forth of messages in the past few weeks “indicates that there has been a shift” in the PDVSA’s position, and points to “the possibility of reaching a viable agreement to renew” the shipments, said the statement, published on the front page of Granma, the newspaper of Cuba’s ruling Communist Party.

Venezuelan diplomats said last week in Havana that PDVSA rules were keeping the company from resuming oil exports to Cuba until a financial agreement was reached on Havana’s debt, estimated at 100 million dollars.

However, “there has been no suspension or revision” of the Caracas Oil Accord, through which Cuba purchases 53,000 barrels a day of Venezuelan crude under preferential terms, Olga Fonseca, the business attache at the Venezuelan Embassy in Cuba, told IPS.

The contract, which expires in 2005, fulfills 33 percent of Cuba’s petroleum needs.

Between December 2000 and last April, Cuba received 25,589,000 barrels of oil, for a total value of 675 million dollars, paying 439.7 million dollars in cash as agreed.

Another 127.7 million will begin to fall due in 2003. And on Apr 11, Cuba was to begin paying off a 90-day loan and a restructured debt, according to the statement published by Granma.

The communique said Venezuela’s oil exports to Cuba were affected by a strike declared by PDVSA managers and white-collar workers on Apr 5, and later by the Apr 12 coup d’etat that briefly overthrew President Hugo Chávez.

After Chávez reclaimed the presidency on Apr 14, one of his first moves was to replace the PDVSA board of directors as demanded by the dissident managers and workers, who were complaining that the company had begun to be run according to political interests rather than business criteria.

The Venezuelan government and the oil company’s new board of directors confirmed that the agreement to sell crude to Cuba was still in effect.

The Cuban government said that before the short-lived coup, PDVSA had sent only one of the four shipments that should have been delivered, and that CUPET’s efforts to get the deliveries flowing again had been fruitless. Even consignments already loaded on ships to send to Cuba were sold instead to third countries, on the decision of PDVSA authorities.

Cuba had to cover the resulting deficit by purchasing crude from intermediaries, at higher prices, “which were driven up even further by the urgency, and by high shipping costs and the distances involved, since some of the shipments had to be brought in from Europe and Africa.

“All of this has led to the outlay of tens of millions of dollars over what was budgeted, at a time when everyone is well aware of the financial difficulties faced by this country, due to a combination of adverse circumstances,” the communique added.

Despite its financial problems, Cuba has paid “every cent of the supplies of this vital commodity, the price of which has risen in a form proportionately inverse to the prices of the export products of a large number of Third World countries,” said the statement.

Cuba’s oil imports are the source of its biggest financial worries. Last year, the government spent one billion dollars on the fuel consumed by the country’s thermoelectric plants alone.

According to projections, Cuba will produce around 3.3 million tons of oil and 600,000 tons of natural gas this year, while consumption needs are estimated at nine million tons.

Local authorities have stepped up a campaign to encourage households to save energy, and new restrictions were imposed on state enterprises, with the aim of reducing consumption by 10 percent.

The statement published by Granma on the suspension of Venezuelan oil imports was the first official reference to the issue.

“I didn’t know Chávez wasn’t sending us the oil,” said Carlos Urzúa, a retired transport worker, as he bought a newspaper at a stand in the downtown Havana neighbourhood of El Vedado.

Earlier this month, Minister of Basic Industry Marcos Portal told a group of foreign correspondents that shipments of Venezuelan crude had not been delivered since the Apr 12 aborted coup. However, his remarks were not published by Cuba’s state-run press.

Diplomats believe the official statement released Thursday is aimed at preparing Cubans for an imminent rise in the price of fuel and several basic items sold in the state-owned chain of stores that only accept dollars.

Although price rises have not been officially announced, CUPET employees recently said that premium gasoline would rise from 90 cents of a dollar to 1.20 a litre, mid-grade from 0.66 to 1.05, while regular will be sold at 0.85 cents a litre.