THE NEW YORK TIMES
December 14, 2008
Cuban President in Venezuela in First Official Foreign Visit
By SIMON ROMERO

CARACAS, Venezuela — President Raúl Castro of Cuba arrived here on
Saturday on his first official foreign visit since assuming power two
years ago from his ailing brother, Fidel. The decision to visit
Caracas first highlights Cuba’s continuing reliance on subsidized oil
and other forms of aid from Venezuela.

The visit is an opportunity for President Hugo Chávez of Venezuela to
burnish his revolutionary credentials. He has vowed to strengthen
ties with Cuba’s new leadership despite cultivating a much warmer
relationship with Fidel, who is 82 and living in seclusion.

“I bring a salute to all the Venezuelan people, an embrace from the
Cuban people and the chief of the revolution, Fidel Castro,” Raúl
Castro said after arriving here.

Mr. Castro, 77,and Mr. Chávez discussed a range of cooperation
projects in areas like agriculture, education, medicine and athletic
training that are supported by thousands of Cuban advisers operating
in Venezuela. The two leaders signed an agreement opening the way for
Venezuela to continue assisting Cuba inincreasing its oil-refining
capacity and to eventually build a plant in Cubato import liquid
natural gas.

Cuba is by far the largest beneficiary of Venezuela’s foreign aid,
receiving, for instance, more than $150 million to build a
petrochemical complex in Cienfuegos on Cuba’s southern coast. But
with oil prices plunging recently, the financing for some of
Venezuela’s foreign aid projects has come into question. Cuba’s
government may also be worried about possible disruptions in
subsidized oil exports, which were cut early in the this decade
during an oil strike here.

Given that uncertainty, Mr. Castro has also been trying to deepen
ties with other trading partners like China and Brazil.

Indeed, before Mr. Castro’s visit to Caracas was announced this
month, Cuba’s government had said that he was planning to go to
Brazil for a meeting of Latin American and Caribbean countries
convened by President Luiz Inácio Lula da Silva of Brazil.

After stopping in Caracas, Mr. Castro is still expected to travel to
Brazil in the coming days, raising the prospect of stronger relations
with Brazil and, perhaps, even of a potential option for back-channel
dialogue with the coming Obama administration.

The government of Mr. da Silva, a former leftist labor organizer, has
expressed a strong desire to strengthen relations with both Havana,
which Mr. da Silva has visited twice in the past year, and
Washington.

“The U.S. approach to Cuba will unfreeze with Obama,” said
Christopher Sabatini, senior director of policy at the Americas
Society, a policy organization in New York focusing on Latin America.
“Lula has both the international cred and the ideological cred to be
an interlocutor in this process.”

Cuba’s potential in developing alternative forms of energy also
figures high on Brazil’s efforts to cultivate warmer ties with Cuba,
with Brazilian sugar and ethanol producers seeking to interest Cuba
in Brazilian ethanol technology and investment, possibly as a way to
circumvent an American tariff on imports of Brazilian ethanol if
Washington’s embargo is altered.

“The Brazilians are taking a long-term view on Cuba as an entry point
into the Caribbean and even the United States,” said Jorge R. Piñón,
an energy fellow at the University of Miami. “As for the Cubans, they
are still recovering from the shock of losing the Soviet lifeline, so
they want an insurance policy in case of changes in relations with
Venezuela,” he said. “The Cubans are getting their ducks in a row.”

But while Brazil has emerged as Cuba’s second-largest trading partner
in Latin America, its influence in Cuba is still dwarfed by that of
Venezuela, whose subsidized oil exports to Cuba were valued at $3.01
billion this year through November, according to a new study by the
Center for Hemispheric Policy at the University of Miami.

Moreover, Venezuela is also financing another refinery expansion in
Santiago in eastern Cuba, a project that, combined with the upgrade
of the oil and petrochemical complex in Cienfuegos, could put Cuba on
the road to becoming a potential regional oil-refining center.

Cuba’s recent announcement that its offshore oil reserves could hold
as much as 20 million barrels has also set off fierce speculation in
energy markets over whether the estimate was accurate and, if so, how
that petroleum would eventually be commercially explored.

For now, the American embargo on trade with Cuba has limited the
ability of American oil companies and foreign oil companies with
large operations in the United States from striking deals to produce
oil in Cuban waters or offer the Cuban government energy services in
the form of drilling or geological work.

But that framework for dealing with Cuba could change, explaining why
Mr. Castro has welcomed the Venezuelan investments in Cuba’s
refineries and has reached out to oil-exporting countries like
Russia, Angola and Brazil, which is increasing its own oil production
after a series of huge offshore oil discoveries.

“We already have extensive oil dealings with a monarchy in Saudi
Arabia, a failed state in Nigeria and Venezuela, which is Cuba’s top
patron,” said Jonathan Benjamin-Alvarado, an expert on Cuba’s energy
industry at the University of Nebraska-Omaha. “Why should Cuba, which
is relatively stable and close to our major ports and refineries, be
an exception?”
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WALTER LIPPMANN
Los Angeles, California
Editor-in-Chief, CubaNews
http://groups.yahoo.com/group/CubaNews/
"Cuba - Un Paraíso bajo el bloqueo"
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