May 4, 2017 - San Francisco, CA - PipeLineNews.org – In an April 24 feature piece [Existential Threat To America From Russian Driven, South of the Border Marxists] on the continued communist predation that is taking place South of the border, we noted:
While the eyes of the Free World’s are fixed on foreign policy issues relating to the Middle and Far East, a threat, certainly closer and possibly of more concern looms.
This is especially true long term - because of the proximity factor and the fact that it is largely being ignored. What we are referring to is the hastening push into South and Central America by agents and agent states of the world-wide Marxist-Leninist-Maoist insurgency.
Cutting to the chase on the present concern, Nicolas Maduro’s imploding Venezuela:
As if to underline the potential danger here, consider that the below is from a left-leaning news source:
“Venezuelan national oil company, PDVSA, created a joint company with Russian oil firms to develop four blocks in the Orinoco Oil Belt…PDVSA also signed..[deal with Sovcomflot, Russian gas and shipping…Russian energy company INTER-RAOUES will build a thermoelectric plant with a 200-500 megawatt capacity in Venezuela…[nuclear energy was discussed in Chavez-Putin confab] Venezuela purchased four Mi-17 helicopters and more than 90 T-72 tanks from Russia…[the two countries have increased]…bilateral relations in recent years by creating a bi-national bank with $4 billion in capital, launching gas exploration off the Venezuelan coast, and investing in the renovation of Venezuela’s infrastructure….Russia is also building a machine gun factory in Venezuela, and Venezuela has purchased more than $4 billion worth of Russian Sukhoi fighter planes, helicopters, and tanks since 2005.” [source, James Suggett, Russia and Venezuela Deepen Ties with Energy, Military Deals , Venezuelanalysis.com]
Some may be surprised that a country like Venezuela would purchase nearly 100 main battle tanks. Though the T-72s are a bit long in the tooth [first units were cranked out 4 decades ago] they nonetheless pack a lot of pop courtesty of a 125mm smoothbore main cannon as well as a 12.7 mm [.50 cal] heavy machine gun.
What has escaped the majority of the media is how Putin has skillfully maneuvered Russian foreign policy to take advantage of Venezuela’s ailing oil industry. Once a powerhouse, now with reduced oil prices and the absence of ChiCom and Russian subsidies Putin has, via the state owned Rosneft, shrewdly grabbed some of the low hanging fruit.
Of note, in 2007 Chavez nationalized Exxon’s assets in the country . Responding, Exxon took the matter to international arbitration and was awarded $1.6B, much less than the value of what had been expropriated. In 2010 Venezuela seized 11 oil rigs from the U.S. company, Helmerich & Payne , the company [and its Venezuelan subsidiary] sued with the DC Circuit finding for the plaintiff, but in an unbelievable unanimous decision, this week SCOTUS found [8-0] overturned the opinion, upon the claim that basically these kinds of suits potentially had the effect of harming international relations by “creating additional complexities” for jurists both domestic and internationally [see, Bolivarian Republic of Venezuela et al v. Helmeruch & Payne International Drilling, No. 15–423]
What this means is that Venezuela, though apparently on the verge of civil war [33 citizens killed over the last few weeks] has a really considerable inventory of oil related assets that it can use to partially pay its foreign debts…think Russia here.
Additionally Rosneft has folded other oil related purchases into its portfolio, leaving Russia well poised to ride out the current oil glut and move aggressively should [when] the international situation change:
“The core of Rosneft’s Venezuela holdings, producing roughly 140,000 bpd, are fields that BP had sold off to TNK-BP after the Deepwater Horizon disaster, and which came to Rosneft when it bought TNK-BP in 2013. Pdvsa has sold other assets to Rosneft. In 2010 a refinery in Germany went for $1.6 billion. In 2015 Rosneft CEO Igor Sechin visited Caracas and promised to invest $19 billion in Venezuela by the end of the decade. Last July Sechin came back to ink a JV on five field developments. Rosneft has since paid $500 million to boost its stake in the Petromonagas JV, and looks likely to buy a slice of the Petropiar project, operated by Chevron.
Rosneft remains sanctioned for Putin’s invasion of Ukraine and Crimea. It would be an embarrassment to international attempts to contain Putin for him to end up with three U.S. refineries and 48 terminals that move about 25 million gallons of gasoline a day. Rosneft in December announced that it had sold 19% of its shares for about $10 billion to a group including commodities giant Glencore and the Qatar Investment Authority. [source, Christopher Hellman, Russian Oil Deals Offer A Lifeline For Venezuela's Embattled Maduro , Forbes]
Takeaway, the Russian Bear has lost none of the abilities on the international stage that the Soviet Union repeatedly demonstrated even when having been dealt a bad hand.
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