Transneft Considering Cuba’s Proposal to Develop Its Oil Pipelines

Interfax

Cuba has proposed that Russia’s Transneft take part in developing the oil pipeline infrastructure on its territory, the company’s director Nikolai Tokarev told journalists.

“They have very old pipelines, which need reconstruction. New [pipelines] need to be built as well. Experts are analyzing the extent to which Transneft can take part in this,” Tokarev said.

Transneft worked out the concept of its participation in Cuba’s oil pipeline infrastructure. “We have already sent them our questions on technical aspects of the project. We are awaiting their reply,” he said.

Agreements have yet to be reached, but if Transneft considers the project as interesting, the issue could be about setting up a Russian-Cuban joint venture, he added.

Let me interpret this for those of you who do not understand how business ventures work in Cuba.

Cuba will agree to a Russian-Cuban venture if Russia pays for all the materials, pays Cuban workers at international wages to the Cuban government who then pays their workers in worthless pesos AND splits the profits with Cuba and/or gives Cuba money, oil, technology and/or equipment.

Russia gets to provide all the materials, bare all costs of construction and maintenance and then gets to give Cuba credit in order to purchase oil and/or refinery parts or the like. For this they get half of the profits, probably paid to them in IOUs from the Cuban government.

Sounds like a great deal for Russia.

Just found this story too about other Cuba-Russia business deals.

Cuba already owes Russia about $5billion in debt but Fidel is still pissed off at Russia for pulling out in 1990 so he is punishing Russia by not paying them. Now it seems like Russia wants to loose (oh I’m sorry, I mean invest) more money in Cuba.

They can get in line behind all the other countries waiting to get paid.