Gary Brookins Cartoon - Cold War

La Nueva Cuba has published two articles related to Russia, Cuba and Latin America.

The first is an editorial by Pravada titled “Battle for Ossetia transferred to Latin America,” stating Russia’s support of its allies (Cuba, Venezuela, and Bolivia) in Latin America.  There is no English translation, however, a Spanish one is made by Urgente 24 from Argentina.  And the second article is an interview (in Spanish) of Dr. Valdimir Zudarev (Vice-Director of the Russian Academy of Sciences’ Latin American Institute) by Radio Nederland’s InformaRN, who is quoted as saying: “Moscow wants to return to Latin America.”

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ISN Security Watch has an article addressing Cuba’s international relations leverage and foreign investment:

When Russian daily Izvestia reported on 21 July that Russian Tu-160 and Tu-95MS bombers had landed in Cuba, it set off a sprint in Washington as analysts and military leaders struggled to understand the situation.

At first, it appeared that Moscow had made a very serious gesture. Russia’s perceived geopolitical maneuver in Cuba, many thought, was in response to the US’ plans for an anti-missile shield defense system in Poland and the Czech Republic.

By 24 July, after three days of media hype and speculation over Russia’s true intentions, Russian Defense Ministry spokesman Ilshat Baichurin, dismissed any intention for a strategic deployment in Cuba.

Two events quickly followed up this announcement. Russian Deputy Prime Minister Igor Sechin arrived in Cuba on 30 July for extended talks with Raul and Fidel Castro. A former KGB operative and known confidant of now-Russian Prime Minister Vladimir Putin, Sechin was an active operative during the Cold War and enjoyed a deep relationship with the Castros.

Putin then followed up Sechin’s visit with a 5 August announcement that Russia ought to “restore [its] position in Cuba and other countries.”

Observers agree a military presence in Cuba is not in Moscow’s best interests; rather, closer economic ties would behoove both nations. Sechin’s recent visit underlines the latter observation and coaxes Washington into a more open posture toward Cuba, an island nation the next US presidential administration would likely prefer not to lose again to the Russians. [Read more →]

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Radio Netherlands examines Russian interest in restoring its military base in Cuba and the Cuban government’s lack of interest:

Cuba itself has already made it fairly clear that there’s no question of a renewed Russian military colonialism. The country is still sore at the fact that the collapse of the Soviet Union in 1991 brought an end to the liberal flow of funds from Moscow. And the leadership in Havana hasn’t forgotten that ten years later, without any consultation, Russia ended to its last military presence in Cuba: the vast intelligence base in Torrens, better known as “Lourdes”, from which legend has it a pin could be heard falling anywhere in the southern United States, and all US communications could be tapped.

The present Cuban leader Raúl Castro would also seem to have little to gain from Russian sabre-rattling over Cuba, particularly as he now seems to be taking cautious steps towards improving relations with the United States.

Quite apart from all the overblown talk surrounding Cuba, it’s plain that the Russian army is using the extra billions in revenue from oil and gas sales to bring its military hardware up to scratch. New nuclear weapons and nuclear submarines have been developed, and an order has just been made for twelve new aircraft carriers (albeit of a modest size and without the usual nuclear propulsion), and there are feverish attempts to lift the armed forces out of the mess into which the once so mighty Red Army descended after the fall of the Soviet Union.

From the perspective of military strategy, there is no sign that Moscow has the least interest in Latin America, other than for occasional arms sales to countries like Venezuela. Russia’s geopolitical priorities now lie in Asia, where it is seeking a strategic partnership with China and India, and was co-initiator of the Shanghai Cooperation Organisation (SCO), a potential future counterpart to NATO. In contrast to the vague events now surrounding Cuba, in 2003 there was a military exercise to really set the alarm bells ringing. For the first time since 1991, Russian strategic bombers appeared above the Indian Ocean. The scenario of the exercise was plain enough: how to take out an entire US naval unit using nuclear cruise missiles. There’s nothing vague about that.

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Via Stratfor:

Russian Deputy Prime Minister Igor Sechin arrived in Cuba on July 30 to discuss Russian energy investments on the island with the Cuban leadership.

On the surface, this looks like any old state visit between the Russians and the Cubans. But there are a number of reasons why this visit in particular caught Stratfor’s attention.

First, the visit comes as Cuba has resurfaced as a source of geopolitical friction between Russia and the United States. In recent days, a series of rumors and denials on everything ranging from relocating Russian bombers to Cuba to Russia setting up a small aerial refueling base on the island have been making their way through the Russian press. While the Russians have not made any concrete moves yet, the specter of Russia returning to the U.S. periphery is more than enough to grab Washington’s attention.

Second, the Russian official who made the visit is none other than Sechin, a longtime ally of Russian Prime Minister Vladimir Putin and the leader of one of Russia’s two major factions. Sechin is an enormously influential figure in the Russian leadership. As a former KGB man, he commands the loyalty of Russia’s powerful Federal Security Service (FSB). Moreover, as vice premier, he has considerable oversight over the Russian energy industry and is (not by coincidence) the boss of Russia’s giant state oil company Rosneft.

Sechin does not typically have such publicized visits. He is man who works in the shadows as any former KGB official would. Not only has this visit been publicized in both the Russian and Cuban press, but it was specifically printed in the English-language Moscow Times, which is designed for Western consumption. This visit was intended to grab the attention of the U.S. administration, particularly Kremlinologists like U.S. Secretary of State Condoleezza Rice and segments of the CIA who were knee-deep in combating his activities in Latin America during the Cold War — and are likely all too familiar with Sechin’s history with the Cubans.

Washington is not going to be too comforted by the idea that Sechin is linking up with his old drinking buddies on the island. During his decades-long stint in the KGB during the Cold War, Sechin himself organized the Soviet Union’s illegal arms transfers in Latin America and Africa, which involved him having a close relationship with the Castro brothers. While Sechin is most certainly discussing business during this visit (including talks on Russian firm LUKoil building a refinery in Cuba to process Venezuelan heavy crude), this visit is about much more than energy deals. Russia is signaling to the United States that it may be ready to get aggressive again in Washington’s backyard, and Russian leaders like Sechin are going to be the ones to lead this effort.

[Photo: Russia Profile]

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Stratfor provides analysis about the current strategic issue in the Western Hemisphere and poses the question: what about subs instead of planes in Cuba?

Summary

With rumors flying (along with subsequent denials) about the potential stationing of Russian military aircraft in Cuba, there is another possibility: the stationing of Russian submarines. It would be a Cold War redux — and an effective way for Russia and the United States to hone their submarine and anti-submarine tactics.

Analysis

During the Cold War — even after the Cuban Missile Crisis in 1962 — Cuba offered an important port for Soviet submarine operations along the U.S. eastern seaboard. Though the rumor mill this week has concentrated on Cuba as a potential refueling base for Russian aircraft — one with no munitions — there is another (unmentioned) possibility worth considering: What about the return of Russian submarines?

U.S. submarine operations in the Barents Sea enjoy not only the use of nearby ports in NATO countries but also rotations facilitated by a fleet of some 50 attack submarines. Russia’s submarine fleet is doctrinally inclined more toward surge deployments in times of crisis than the sustained global presence that the U.S. Navy has been perfecting since World War II. Though Russian subs could lurk in Atlantic waters close to Washington, Russian crews are neither accustomed to nor drilled in such lengthy deployments.

In addition, given the neglect of the 1990s on Russia’s fleet — subsequent maintenance and upgrades aside — reliability remains a concern, and lengthy Russian deployments leave subs much farther from friendly ports than do lengthy deployments of the U.S. fleet.

[Read more →]

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Via Stratfor:

Russian oil firm LUKoil’s plans to purchase a refinery in Cuba are on hold because of the difficulty of investing in crude production in Venezuela. LUKoil founder and CEO Vagit Alekperov said June 26 that without a crude supply for the refinery, the planned purchase would not make sense. Venezuelan President Hugo Chavez might change his mind on his country’s prohibitive attitude toward foreign investment in crude production; with various pressures on his regime, Chavez has recently shown the capacity to reconsider past decisions. Otherwise, he will have to count Alekperov among his enemies.

Russian oil firm LUKoil’s plans to expand into Cuba have been put on hold. LUKoil wanted to buy a refinery in Cuba, supply it with crude oil produced in Venezuela and wait for the U.S. embargo on trade with Cuba eventually to end. This would give LUKoil the chance to squeeze into the highly competitive U.S. market.

However, this long-term project faces a major roadblock. Venezuelan President Hugo Chavez’s burdensome and investment-unfriendly tax laws make investing in Venezuelan crude production extremely difficult for foreign companies. The U.S. firms have all left Venezuela, but even the companies that came in to fill that void — such as LUKoil — are not finding investment conditions favorable. This means that LUKoil’s plan to ship crude from Venezuela to Cuba for refinement is not going to be feasible under current conditions — not even at $130-per-barrel cost of oil. LUKoil founder and CEO Vagit Alekperov said June 26 that the firm “cannot afford to take the risk of viewing these [Venezuelan] projects as a source of supply of the Cuban refinery. And to buy a refinery without having crude supply logistics does not make sense.”

In other words, Venezuela’s current investment environment is leaving LUKoil with no way to control both the upstream and the downstream assets for petroleum product exports to the United States. Thus, Chavez might have just made a new enemy: Alekperov.

LUKoil, Russia’s most efficient privately owned energy company, has been on a serious campaign of global expansion for quite some time. It moved into the Northeastern U.S. gasoline-station market by acquiring Getty Petroleum in November 2000 and then bought Mobil-branded gasoline stations from ConocoPhillips in January 2004. In total, Lukoil has more than 2,000 U.S.-based gasoline stations, mostly in the Northeast. The idea behind the global expansion is to make a completely separate international arm of LUKoil that would be beyond the Kremlin’s reach. This is Alekperov’s way to insure that he could maintain a major presence in the global energy trade if Moscow nationalized his business in Russia.

A major part of Alekperov’s global strategy consists of expansion into the U.S. market. Considering that LUKoil already has a well-developed gasoline-station network in the Northeastern U.S., it also makes sense to acquire refining capacity nearby. Cuba is a great partner for LUKoil because of its location directly in the shipping path for potential crude production in Venezuela. LUKoil can also get into Cuba’s refining sector before others, because it has the advantage of Russo-Cuban political connections. The deal to buy a refinery possibly follows from reforms under Raul Castro’s leadership that have made Cuba more investor-friendly. Cuba has allowed partnerships with foreign companies as well as private acquisitions of some industrial enterprises. More specifically, one of Cuba’s economic goals is to become a refining hub.

But without Venezuelan crude production, LUKoil is left with few upstream options for crude in the Western Hemisphere. LUKoil could get oil from the spot market or even from Mexico, which is near enough to Cuba to make it work logistically, but in order to compete in the world’s richest and most competitive energy market — the United States — LUKoil needs to find other ways to lower costs, and it needs to be in charge of both upstream and downstream deals in order to make a long-term commitment to the Western Hemisphere. Aside from the Venezuelan crude, there simply are no other real alternatives.

There may still be a sliver of hope for LUKoil: Chavez could always change his mind, particularly ahead of his summit with Russian President Dmitri Medvedev in late July. On the agenda for that summit, announced on June 26 , is a proposed agreement on mutual protection of investments, which could signal that LUKoil has managed to lobby both Caracas and Moscow enough to get a break on the taxes it needs to pay. Chavez is also feeling a lot of domestic economic pressure that could make him rethink his policy toward foreign investors.

That said, if the investment situation does not improve, Chavez will have to deal with Alekperov as an enemy. A powerful Russian oligarch who has managed to steer a private energy company from Russia into a position of considerable global success despite the predations of Gazprom and Rosneft, Alekperov has many reasons to hope that Chavez is ousted. And Chavez should keep in mind that Russian oligarchs usually do not sit around hoping that things happen — they usually make sure things happen.

[Photo: LUKoil founder and CEO Vagit Alekperov - AFP/Getty Images.]

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