Venezuelan Oil Subsidies to Cuba Top $3 Billion, Report Says

Venezuelan Oil Subsidies to Cuba Top $3 Billion, Report Says

By Matthew Walter

Aug. 2 (Bloomberg) -- Venezuelan oil subsidies to Cuba rose to $3.4
billion in 2006 and may top $4 billion this year, as the Caribbean
nation's reliance on aid from ally Hugo Chavez intensified, according to
a University of Miami study.

Cuba's dependence on Venezuelan oil is beginning to mirror its
relationship with the Soviet Union in the 1970s and 1980s, Jorge Pinon,
senior research associate at the university's Institute for Cuban and
Cuban-American Studies, wrote in the report released today.

``This clearly reflects the extent of the economic dependence by Cuba on
Venezuela's current regime and at the same time the commitment of Hugo
Chavez to support the Cuban government,'' he wrote in the report.

State-owned Petroleos de Venezuela SA yesterday began searching for
light oil off the coast of Cuba, another sign of strengthening economic
ties between the government's of Venezuelan President Chavez and Cuba's
Castro, both harsh critics of the United States.

The study extrapolated the value of oil subsidies to Cuba using market
values. Cuba is probably not paying for imports of crude oil and refined
products with hard currency, representing a significant loss of revenue
for Venezuela, according to the report.

To contact the reporter on this story: Matthew Walter in Caracas at
Mwalter4@bloomberg.net
Last Updated: August 2, 2007 19:02 EDT

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