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At summit, nations see oil as path to prosperity
Cat : Miscellaneous
Date : 2006-09-16 10:43:07                      Reader : 333
When food surplus is burnt, or dropped in the sea to beep prices up, instead of giving it to south, millions die yearly up to fifty millions like victims of WWTT. Such policy must end to save the world.

Google News 16/9/2006

At summit, nations see oil as path to prosperity


'Look at the potential' of our reserves, Chavez tells leaders at Cuba conference


HAVANA - As leaders of the world's poorer countries huddle in Cuba this week to plan common goals, the aroma of the country's 1,000-volt coffee and the pungent smoke of its best cigars mingle with the faint but distinct gurgle of bubbling crude.

The delegates to the Non-Aligned Movement summit are debating how best to stay relevant in a world dominated by U.S.-style capitalism. And many of the leaders have come bolstered by windfall profits from the boom in oil and the other raw materials they sell to the more developed world.

"We have to look at the potential we have," Venezuelan President Hugo Chavez told a select group of summit leaders Thursday, pointing out that five of the 15 countries at the meeting were oil powers.

"Look at the oil reserves, the gold reserves," he said. "Look at the potential."

Chavez, who hopes to win a seat on the U.N. Security Council with support from poorer countries, has for several years freely spent his country's oil wealth in an effort to win friends and influence people on a global scale.

Perhaps that effort bought Chavez the chance to speak for an hour at the non-aligned conference Thursday — far longer than any other speaker, including Cuba's acting head of state Raul Castro — making his ambitions of being a world leader quite clear.

"Imperialism failed," Chavez told the delegates, who included Iranian President Mahmoud Ahmadinejad, clearly referring to the United States. "This is a critical moment for us, but also a promising one if we know how to take advantage of this historic time.

"Only united can we be free," Chavez said. "Only with courage can we liberate our people."

And perhaps only with a lot of petroleum. Or so might be the case with Cuba.

White knight
Venezuela under Chavez has become something of a white knight for the still-struggling Cuban economy, which was slammed when the collapse of the Soviet Union in the early 1990s robbed it of subsidized oil.

Chavez's government sends Cuba as much as 100,000 barrels of oil or petroleum products daily on very favorable terms, augmenting Cuba's production of about 75,000 barrels a day. Though Cuba's oil production has jumped fivefold in two decades, it still meets only about a third of the country's oil needs.

That might change quickly.

The U.S. Geological Survey estimates that 4.6 billion barrels of oil and 9.6 trillion cubic feet of natural gas may lie hidden in the deep waters off Cuba's northern shore.

Eyeing that kind of geology, more and more foreign oil companies, from Spain, Norway, China and India, are jumping into Cuban waters, despite mixed exploration results to date and Washington's continued disapproval. India's government-owned oil company, ONGC, signed a deal to conduct deep-water oil exploration in the Cuban waters of the Gulf of Mexico.

Spain-based Repsol YPF discovered high-quality crude in Cuban waters two years ago, although not in commercial quantities. But Repsol officials were intrigued enough to drill more wells, and both Norway's Norsk Hydro and ONGC signed on as partners.

Last week's announcement of a major deep-water find in the Gulf by a Chevron-led partnership has boosted expectations for both Cuba and Mexico.

"Cuba will soon be joining OPEC," Chavez said Thursday, referring to the cartel of oil-producing countries and jumping the gun by more than a little.

Canadian firms

Two Canadian firms, Toronto-based Sherritt International and Montreal's Pebercan, already are pumping oil in Cuba, under production sharing agreements with Cuba's oil company, Cubapetroleo.

Much of that oil is a poor-quality heavy, high-sulfur crude, requiring special processing at Cuba's refineries. Few oil industry experts expect that Cuba will ever become an energy exporter.

"They'll be lucky to get their domestic requirements," said Manouchehr Takin, senior petroleum upstream analyst for the London-based Centre for Global Energy Studies.

Still, the prospect of foreign oil companies drilling so close to U.S. waters while American firms are shut out is ringing some bells in Congress, adding to the calls for ending the nearly half-century-long U.S. economic blockade of Cuba.

"The American public would be shocked and stunned," Sen. Larry Craig, R-Idaho, one of the oil industry's staunchest congressional allies, said earlier this year, "that as this country faces a serious energy crisis at home, countries like China, India, Canada, Spain and Norway are exploring and drilling 50 miles off the U.S coast.

"Yet, current U.S. policy prohibits our companies from competing with these foreigners in these resource-rich waters," Craig said.

China, which is increasingly competing with the United States and Europe for access to raw materials and consumer markets in Latin America, Africa and Asia, sent a delegation to the Havana conference. The U.S. turned down an invitation to send an observer contingent.

Though it has empowered leaders such as Chavez, the current price-spiking oil boom of recent years has hurt many poor countries far more than they have the United States or other wealthy nations. That fact isn't lost on many of those taking part in the Havana talks.

Some of those leaders argue that this conference should focus on long term sustainable policies to bolster developing nations rather than oil-lubricated grandstanding.

"The fact that we have more competition for oil and increase in the price is good for for us, but not for many of our colleagues," said George Chicoty, the assistant foreign minister of Angola, a long time ally of Cuba that has become a major oil supplier to the United States.

"We have to look for sustained policies, because oil alone cannot resolve the problems of the South," Chicoty said, using the favored term for poor countries of the southern hemisphere. "Oil may be an asset today, but not tomorrow," he said. "We shouldn't be overly excited about oil."

Globe-trotting leader
Still, oil is fueling expectations for some, notably including Venezuela's globe-trotting leader.

Chavez recently returned from a trip to Asia and the Middle East where he inked oil-related deals with China, Malaysia, Iran and Syria.

On Thursday, he pledged to defend Cuba and Iran in their confrontations with the U.S., building on earlier statements of support for Iran, whose efforts to develop a nuclear program is opposed in Washington and European capitals.

''Iran is under threat; there are plans to invade Iran, hopefully it won't happen, but we are with you," Chavez told Ahmadinejad. ''Under any scenario, we are with you just like we are with Cuba. If the United States invades Cuba, Venezuelan blood could run here as well. We will not have our arms crossed while bombs are falling in Havana or they carry Raul off in a plane."

Oil "certainly helps Chavez's own political project to stay in power as long as he can," said analyst Michael Shifter, with the Inter America Dialogue, a Washington, D.C., policy center. "A lot of money doesn't hurt. I don't know how that translates into the betterment of the rest of the region or even of Venezuela."

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