President R. N. Kovind’s visit to Suriname and Cuba in June was a feeble attempt to reiterate India’s ‘interest’ in the LAC region. Considering the scanty number of high level visits to the region, Indian VVIP visits to Cuba have been fairly impressive. Vice President Ansari’s visit in 2015 was preceded by PM Manmohan Singh in 2006 and EAM S M Krishna in 2012. Considering the extremely low economic value of the relationship (around $40 million trade annually, zero Indian investment after ONGC exited Cuba in 2014), a visit to sign agreements on biology and medicine may appear extravagant to countries where India can have a greater stake. The visit to Suriname was clearly to consolidate India’s links with a diaspora that makes little economic contribution to India.
Another outreach attempt was the first official overseas visit of Vice President Venkaiah Naidu to Guatemala, Panama and Peru 6 to 11 May. Indian exports, particularly pharma, figured in his conversations. Peru is especially important as a growing trade partner for India, a member of the Pacific Alliance, and interested in negotiating a comprehensive free trade agreement. Guatemala agreed to support India’s candidature for a non-permanent seat in the UN Security Council 2020-21, while Peru reiterated support for India’s permanent membership of the UNSC.
India’s ONGC Videsh Ltd. (OVL) declared to the media that Venezuela has stopped paying its dues. OVL had entered into an agreement to develop the San Cristobal oilfield in Venezuela in 2008, and thereafter in 2010 signed up to develop the even bigger Carabobo oilfield. Mismanagement by the Venezuelan government and PdVSA led to cash flow problems. OVL got $ 56.224 million for 2008, but dividends for 2009 to 2013 totalling $ 537.631 million remained unpaid. In November 2016, according to OVL’s Managing Director, PdVSA signed an agreement that provided for dues to be cleared in instalments: "We received three instalments totalling $ 88 million but subsequent ones have stopped”. As part of this agreement, OVL would help PDVSA arrange $ 318 million financing for the San Cristobal project and receive 17,000 barrels per day (bpd) of oil. The larger Carabobo project - projected to peak at 400,000 bpd - languishes at 22,000 bpd because of PdVSA’s inability to finance an essential upgrader. OVL has warned that if its dues are not paid the San Cristobal project will die.
July 9, 2018