Another castro money pit

Hugo Chavez's plan to invest $1 billion in a Soviet refinery built for castro out in hurricane-prone Cienfuegos will be nothing but a castroite money pit that will never make money of any kind. The Chavistas and the castroites apparently believe they can command oil refineries to produce oil if they throw enough billions at it. These jackasses could build a whole new refinery for the same cost of refurbishing this piece of crap, but preserving the Soviet legacy seems to be far more important. castro has no idea about the concept of cutting losses. He just lets them run and run. Being castro, it's how he does everything else, too.

A prominent Venezuelan oil man, former president of the state oil company, PDVSA, offers a lot of good reasons why:

Ex-Caracas Oil Head: Don't Invest in Cuba

By FABIOLA SANCHEZ
© 2006 The Associated Press

CARACAS, Venezuela — Venezuela's plans to refurbish an idled Soviet-era refinery in Cuba represent a lost investment for this oil-rich South American nation, a former president of the state-run oil company said Monday.

The Cuban government and state oil company Petroleos de Venezuela SA, or PDVSA, announced an agreement last week for PDVSA to invest US$83 million (euro69 million) to rehabilitate the facility in the southern coastal city of Cienfuegos to refine, store and distribute crude oil.

But former PDVSA president Guaicaipuro Lameda criticized the deal, saying the refinery is too old to run profitably and too many of its Russian-made parts would have to be replaced.

"Making an investment to make that refinery function doesn't permit recovering the investment," said Lameda, who resigned in 2002 and quickly became one of the government's most outspoken critics.

Lameda accused Venezuelan President Hugo Chavez of investing in the aging refinery as a means of giving economic support to his close ally, Cuban leader Fidel Castro.

The rehabilitated refinery would produce about 15,000 barrels of gasoline, 14,000 barrels of diesel, 7,000 barrels of jet fuel, 33,000 barrels of fuel oil and 1,000 barrels of liquefied petroleum gas per day, according to PDVSA.

Production is expected to meet local demand, plus a surplus of about 9,000 barrels of gasoline and 600 barrels of aviation fuel to be exported each day to the Caribbean market.

Cuba will control 51 percent of the new joint venture, called PDV-CUPET SA, with Venezuela holding the rest.

Posted by Mora at April 18, 2006 07:11 AM

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