Weekly Report - 18 July 2006

NICARAGUA | Blocking Sandinistas' Venezuelan oil deal. President Enrique Bolaños gave several different reasons for blocking the Sandinista-Venezuelan firm Albanic from using the storage facilities of the state-owned Petronic, thus thwarting the arrangement whereby Sandinista-run municipalities would receive Venezuelan fuel on preferential terms [WR-06-27]. One was that he did not trust Albanic to carry proper accounts and feared that the funds would be used to finance Sandinista political activity [the flow of funds would be outward-bound]. Another was that the Sandinista-Venezuelan arrangement would not solve the country's energy crisis. The third was that his refusal was a way of forcing Venezuela to write off Nicaragua's bilateral debt, clearing the way for the resumption of the Caracas agreement of 2000, under with Nicaragua could import annually 1.8m barrels of crude, payable over 15 years at 2% interest.

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