Rosneft’s Head holds further energy related talks in Havana

Igor Sechin, the head of Russia’s government-owned oil major, Rosneft, has held further discussions with the Cuban government on closer economic cooperation.

Mr Sechin, the Chief Operating Officer of Rosneft, met with President Castro on the evening of December 16 in Havana according to Granma, which published a front-page picture of the meeting which took place at the Central Committee of the Cuban Communist Party. The picture shows the Russian Ambassador, Mikhail Kamynin, seated on the same side of the table as President Castro and Vice President Ricardo Cabrisas, who is also the Minister of Economy and Planning, and across the table from Mr Sechin.

The visit came shortly after Mr Sechin had met earlier in the day with Venezuela’s President Nicolas Maduro, to exchange views on cooperation in the oil and gas sector. Mr Maduro had visited Cuba briefly reportedly en route back to Caracas from meetings in Istanbul.

Although no further details were given of the meeting in Havana with Mr Sechin, there has been speculation for months that Rosneft is discussing playing a significant future role in both Venezuela and Cuba and may be preparing to sign a major energy agreement in ways that also address outstanding issues of debt.

In October, Rosneft said that it is looking at expanding its co-operation with Cuba following discussions in Moscow between Mr Sechin, and a Cuban delegation that included Cuba’s Energy Minister, Alfredo Lopez. In a statement at the time, the company said that discussions had centred on increasing the supply of oil and oil products, joint oil extraction projects, and possible cooperation to modernise Cuba’s Cienfuegos Oil Refinery.

Separately in the last few days the Cuban media has reported that in August, Cuba took full ownership of the Cienfuegos oil refinery following the ending of its partnership with Venezuela’ state oil company PDVSA. PDVSA had a 49% stake in the Cienfuegos refinery which is now run by Cuba’s National Oil Company, CUPET.

Rosneft’s interest in modernising the Cienfuegos refinery, Cuba’s largest, would appear to replace Venezuela’s offer to do so, first mooted by the country’s late President, Hugo Chavez. The Cienfuegos refinery produces a mix of fuels for the Cuban market. Although it has a theoretical throughput of 65,000 bpd, industry reports suggest that it is processing about 20,000 – 24,000 bpd.

In recent months, Cuba has been receiving crude for refining from other sources including from Russia through Rosneft, and there have been persistent reports in Russian media that Rosneft may take make significant investments in the Venezuelan oil and refining industries to resolve Venezuela’s growing debt and production inefficiencies. If they proceed, Rosneft investments would consolidate Russia’s strategic relationship with both nations, and strengthen its geopolitical influence on the region. (See Cuba Briefing October 16, 2017 and May 8, 2017 for background).

This is an extract from the Caribbean Council’s weekly editorially independent publication, Cuba Briefing, which provides in depth information on current economic, political and commercial developments in Cuba and news on events in Europe and the US that affect the region. Business people, academics, and those with a general interest in Cuba find it an invaluable tool for developing and maintaining knowledge and providing an insight into political, economic and commercial events in the region

The publication is available internationally on a subscription-only basis. SUBSCRIBE TO A FREE TRIAL HERE