We know two things about Vladimir Putin and Nicolas Maduro. Putin loves to navigate in choppy waters and stick it to the U.S. Maduro is desperately looking for a “sugar daddy”.
In exchange for modest loans and bailouts over the past decade, Russia now owns significant parts of at least five oil fields in Venezuela, which holds the world’s largest reserves, along with 30 years’ worth of future output from two Caribbean natural-gas fields.
Venezuela also has signed over 49.9 percent of Citgo, its wholly owned company in the United States — including three Gulf Coast refineries and a countrywide web of pipelines — as collateral to Russia’s state-owned Rosneft oil behemoth for a reported $1.5 billion in desperately needed cash.
Russian advisers are inside the Venezuelan government, helping direct the course of President Nicolás Maduro’s attempts to bring his failing government back from bankruptcy. They helped orchestrate this year’s introduction of a new digital currency, the “Petro,” to keep oil payments flowing while avoiding U.S. sanctions on the country’s dollar transactions.
Venezuela’s still-formidable defense force, once an exclusively U.S. client, is now equipped with Russian guns, tanks and planes, financed with prepaid oil deliveries to Russian clients. Maduro scoffed last year at President Trump’s public threat to use the U.S. military to bring him down, saying Venezuela, with Russian help, had turned itself into a defensive “fortress.”
When will see Russians walking around Caracas or enjoying the beaches as they did in circa 1961-Cuba? As my parents used to tell me, the big joke in Cuba back then was about the super “white skin colors” of the new visitors. Cubans were asking each other whether anybody in Russia ever got a suntan.
What’s Putin up to? What military advantage is there in placing bombers in Venezuela? Wouldn’t they be taken out within minutes in the event of a crisis?
What’s Maduro up to? I spoke with several of my local Venezuelan friends and they don’t see much upside for Maduro.
First, it’s going to take a lot of cash to bail out Venezuela and I’m not sure that Putin has it or is that generous.
Second, Venezuelans are already furious with the Cuban presence. What makes you think that they are going to love their new Russian suitors? At least, they can argue with the Cubans and tell them where to go in “expletive deleted” Spanish.
Third, what about the legal implications of Citgo used as collateral? Are there investor lawsuits in the future?
Again, my friends in Venezuela are hoping that this is the opportunity for President Trump to intervene. I don’t think that will happen but it depends of what Putin’s intentions are.
Putin in Caracas? Something to keep an eye on.
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