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. Last Updated: 07/27/2016

Oil Firms Help Close Cuban Spy Base

Russia has given two state oil firms extra export allocations totaling 5.1 million barrels to help fund the closure of a secret base in Cuba used to spy on the United States during the Cold War, traders said Thursday.

They said Prime Minister Mikhail Kasayanov signed a secret order granting Rosneft and Zarubezhneft the extra shipments for May and June.

The companies will pay the government the difference between a costlier export market and cheaper domestic prices.

Traders said Rosneft and Zarubezhneft will ship 500,000 tons and 200,000 tons of crude respectively to the Lithuanian port of Butinge and the Polish port of Gdansk.

One trader said oil would be lifted from Butinge and Gdansk by a major European trader and sold in Europe. At current prices, net revenues from the extra exports would raise some $120 million.

"Kasyanov put a 'secret' stamp on this resolution. I think it is mainly because of the agreement with OPEC not to boost shipments until July," one trader said.

Many observers say Russia has in fact boosted exports of crude oil and oil products, and will let the agreement drop after June.

Last October, President Vladimir Putin won plaudits in Washington but infuriated Cuba by announcing that Moscow was pulling out of the Lourdes radar station.

Officials say the listening post has cost Moscow up to $200 million per year and has been financed for decades by crude-swap schemes.

Russia exported crude to Venezuelan refineries in Germany, while Venezuela supplied energy-hungry Cuba. However, in 2000 the government halted Cuban oil programs saying they lacked financial transparency.

Traders said the Energy Ministry was considering extending the new arrangement to the third quarter of 2002, when Russia is likely to formally abandon its oil curb deal with OPEC and will need more money to shut down the base.

The government promised oil-producing cartel OPEC to cut exports by 150,000 barrels per day for the first half of the year to help prop up world oil prices.