(Hot Air)
We already learned that Russia was sending bombers to Venezuela for military exercises and supporting the country’s imploding economy. What could Vladimir Putin have wanted in exchange? We’re probably seeing the answer come into focus as Russia moves in to “help” Venezuelan dictator Nicolas Maduro as we head into the new year. Putin is going to bail out Maduro’s failing government with some cash in exchange for establishing some measure of control over that nation’s vast crude oil reserves that are currently lying mostly dormant. (WaPo)
As allies go, Venezuela is a relatively cheap one for Russia. But the potential returns on Moscow’s investment there could be priceless.
In exchange for modest loans and bailouts over the past decade, Russia now owns significant parts of at least five oil fields in Venezuela, which holds the world’s largest reserves, along with 30 years’ worth of future output from two Caribbean natural-gas fields.
Venezuela also has signed over 49.9 percent of Citgo, its wholly owned company in the United States — including three Gulf Coast refineries and a countrywide web of pipelines — as collateral to Russia’s state-owned Rosneft oil behemoth for a reported $1.5 billion in desperately needed cash.
This is bad news for Venezuela and also an undesirable development for the United States. We’re currently in a battle with the Russians (among others) for dominance in the international oil and gas market. We’ve only recently gained the upper hand in that arena, but with Russia now owning half of Citgo and holding the banknotes on much of Venezuela’s proven crude oil reserves, that’s going to give them a serious leg up. Read more