Venezuelan Supreme Court considering case against Chavez's oil treaty with Cuba

CARACAS, Venezuela - Venezuela's Supreme Court is considering a case questioning the legality of an oil assistance pact with Cuba.

The Supreme Court gave National Assembly president Willian Lara 15 days to show that President Hugo Chavez's government "fulfilled legal requirements" before signing the pact in October 2000, a court statement said Thursday. Opposition politicians who filed the case contend the pact is illegal because it wasn't approved by Congress.

Under the agreement, Venezuelan state oil monopoly Petroleos de Venezuela sells 53,000 barrels per day of crude oil to Cuba under preferential financial terms.

PDVSA executives suspended shipments during an April coup that briefly ousted Chavez because Cuba owed dlrs 142 million. After Chavez regained power, PDVSA President Ali Rodriguez ordered the shipments renewed and said the loan had been refinanced.

Political alliance with Venezuela and Cuba speculated: Brazil's da Silva, critic of U.S.*** Alternating harsh anti-American rhetoric reminiscent of the 1960s with efforts to moderate his language in pursuit of middle-class voters, the Workers' Party candidate tried to distance himself from the Forum de Sao Paulo, a group of mostly hard-line communist and leftist parties from around the world that he helped found in 1990. Its last meeting was held in Havana in December.

SAO PAULO - Luiz Inacio ''Lula'' da Silva, a longtime critic of the U.S. role in Latin America, could become Brazil's next president, but he rejects speculation that he would form a political alliance with Venezuela and Cuba to promote anti-American sentiment in the region. Still, da Silva said, he considers himself ''a friend of Cuba'' who would demand the island's inclusion in the U.S.-proposed Free Trade Area of the Americas.

In his first public reaction to claims by U.S. conservatives that he would form an ''axis of evil'' with Fidel Castro and Hugo Chávez of Venezuela, the veteran leftist leader said in written responses to questions submitted by The Herald that such forecasts see the world ``as if we were in the midst of the Cold War era.''

Last week, conservative former White House aide Constantine C. Menges wrote in The Washington Times that ``if the pro-Castro candidate [da Silva] is elected president of Brazil, the results could include a radical regime . . . developing close links to state sponsors of terrorism such as Cuba, Iraq and Iran.'' Da Silva, leading in the polls for the October presidential election, rejected the suggestion as absurd. The 57-year-old former steelworker, who has already made three failed attempts to win the presidency, defined himself as a democratic fighter for social justice whose heroes are Nelson Mandela, Mahatma Gandhi and Dr. Martin Luther King Jr.***

the loan had been refinanced

yup, nothing down, no interest, no payments until your worker's paradise gets back on its feet

i wonder if the venezuelan people approve of turning pdvsa into the equivalent of a buy-here-pay-here used car lot

particularly since consumed oil is hard to repo

July 2002 - Venezuela: With Strikes Looming, All Eyes on PDVSA*** Source: Central Bank of VenezuelaCaracas proposed an emergency fiscal adjustment package May 30 that was designed to cut government spending and raise revenues. So far, this package has been a dismal failure. Proposed tax hikes are languishing, and multilateral agencies have refused to lend, forcing Chavez to seek a $5 billion bridge loan from Libya, sources say. Attempts to refinance Venezuela's debt have been equally unsuccessful, primarily because domestic and foreign investors are wary of the risk.

Caracas was able to raise only around $4 million, or 10 percent of its goal, in a late-June auction of two-month treasury bills. With $6 billion in debt coming due this year, Caracas can ill-afford another work stoppage, especially if it involves its primary revenue source, PDVSA. Oil exports account for 80 percent of Venezuelan exports and about 35 percent of the gross national product.***

March 2002 - Oil and communism don't mix: Venezuela faces energy standoff at petroleum company*** Other bones of contention were the central government's demand that the company hand over $4.4 billion in dividends last year, forcing PDVSA to borrow $500 million to pay the bill; and the oil sales to Cuba, whose leader, Fidel Castro, is Chavez's longtime mentor.

One of the major disagreements centered on the Ministry's insistence on adhering to OPEC production cuts, but forcing PDVSA to continue producing surplus oil that has now filled every available storage facility. Although PDVSA cannot sell the oil, the catch is that it still must pay royalties for producing it to the central government, Lameda revealed after his departure.

"I started warehousing" when prices were $26 per barrel, he told El Universal newspaper. "They're now $16. The barrels are worth less every day. I told the minister that I have to go out and ask for $500 million in loans while I have $300 million in the warehouse."***

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