We’ll be going Down The Rabbit Hole shortly but first…Reuters reported on a move that was foreshadowed a couple of weeks ago. Trinidad & Tobago has asked the US Department of the Treasury for authorization to import gas from Venezuela to restart an idled liquefaction facility.The idea is for Venezuela to send gas from it’s Dragon Field off the country’s eastern coast to Trinidad & Tobago where it can be processed and the resulting LNG (liquefied natural gas) would (could) be exported around the world (Europe is specifically hurting for natural gas with Russia out of the picture due to the invasion of Ukraine).
Even if authorized it remains to be seen how soon the project could be operational and what quantities of LNG could be made available for Trinidad & Tobago to export. The problem, as always, is on the Venezuela side of the equation. The Dragon Field project was headed for production almost a decade ago but stalled over a lack capital and partners. (The article also said sanctions were a factor in the stalling of the project but it was stalled years before 2017 when the first sanctions were issued against the government of Venezuela. All previous sanctions were against individuals.)
The Dragon Field gas reserves are massive, as are Venezuela’s oil reserves. The issue is, will anybody be willing to partner with the Chavistas to produce it as the Chavistas are incapable of producing it themselves. No matter how you slice it, we’re still years away from this being a solution to Europe’s gas problem (which could easily have been solved by the US if Joe Biden had the will to stand up to the “Green New Deal” crowd. The US is the ‘Saudi Arabia’ of natural gas)
Then we have Argus Media reporting that PDVSA (Venezuela government-owned oil company) figures show October oil production up 100,000 bpd (barrels per day) from September. This runs contrary to the independent tracking data that shows exports were down 25% in October. (I’ve previously told you that for years I’ve followed oil production and export figures from Venezuela and the PDVSA numbers are notoriously inaccurate.)
I get that production and exports are not the same as oil can be produced and stored but I’m not sure I’m buying this for two reasons. One is that Venezuela’s storage capacity is severely diminished , so much so, that they had to resort to utilizing decommissioned tanker ships for storage (which led to an environmental problem due to the tankers leaking oil due to lack of maintenance). Two is that in the past when I saw a discrepancy in the numbers reported by PDVSA and the numbers reported by secondary sources , after confirmation, the secondary numbers proved to be accurate. We’re going to need some confirmation on this one.
Note : One of these days the world will stop viewing Venezuela and PDVSA as the Venezuela and PDVSA that existed before 21st Century Bolivarian Socialism. The Chavistas have totally destroyed Venezuela’s oil production capacity, which was six times greater before the Chavistas took over, just as they’ve destroyed pretty much every aspect of life in Venezuela.
Then we have Reuters reporting that “Venezuela’s Long-Suffering Manufacturers Face New Challenge : Colombia Imports”. Despite years of economic turmoil, hyperinflation, prevalence of smuggled goods, (and I would add Maduro’s tax exemptions for imports) some determined Venezuela manufacturers have survived.
Now, with the reopening of the Venezuela/Colombia border they face competition from Colombian imports. The Venezuela government (the Maduro regime) policies don’t support domestic manufacturing and due to the capital reserve requirements for the banks (the highest in the world) there is little to no available credit. This has led to the current trade imbalance of 10 Colombia imports to every Venezuela export. So far, the Maduro regime has shown little interest in protecting Venezuela’s beleaguered manufacturers.
And Reuters also reports that four sources close to the talks have told them that the Maduro regime and the opposition plan to resume negotiations for the upcoming presidential election in 2024 as soon as this month. Is this even news? I mean really …come on. I know the talks are the centerpiece for sanctions easing but the Chavistas have shown, at every turn, they will not negotiate in good faith with the opposition and only use dialog to delay and diffuse international pressure until they can find an excuse to throw up their hands and walk away from the negotiating table. Negotiating for free and fair elections are not in Chavismo’s best interest.
And we have IRNA telling us that Venezuela’s envoy to the UN condemns the UN Security Council “anti-Iran” meeting in violation of the UN Charter. The ambassador had planned to read a statement to the UN to reject “the meddling into the internal affairs of a ‘sovereign’ member such as Iran”.(When all else fails authoritarians always play the “sovereignty” card) Thankfully, the US did not allow the reading of the statement.
It’s time to head Down The Rabbit Hole….
Chapter 6/ continued…
…Also in decree 3.196, two different prices were referenced for a barrel of oil. One referred to the OPEC basket price while the other referred to the Venezuela basket price which are far apart, not to mention one is denominated in dollars and the other in yuan (Venezuela’s deference to it’s Chinese creditors).
“Maduro announces economic overhaul tying new currency and minimum wage to Petro”
“Petro will be additional unit of account for banks” The banks now had to list balances in both bolivares and Petros.
“Maduro claims Petro will be used for international commercial transactions”
“Maduro announces special cryptocurrency teams to conduct cryptocurrency mining nationwide”
“Maduro announces official Petro sales to begin November 5th”
Note: No mention was made of the previous launches nor the previous whitepapers (the total was up to 7 whitepapers for something that usually requires one)
“Maduro says he has a schedule for oil to be sold in Petros in 2019”
“Maduro announces fuel for airlines to be sold in Petros”
Note: Remember, international airlines were required to pay for refueling in Caracas in dollars even though the airlines had billions of dollars being held in bolivares in Venezuelan banks, awaiting conversion to dollars. Now they would have to convert dollars to Petros as well?
“Maduro decrees public authorities and entities must also promote and guarantee the use of cryptocurrency in the public sector”
“Maduro announces central cryptocurrency mining registry”
Note : Without getting into the specifics of cryptocurrency mining, it is essentially adding a block in the blockchain which works as a de facto auditing process as well as facilitating trades and earning the miner cryptocurrency. It’s a flawed explanation but it’s all I’ve got.
I could go on with the announcements, decrees, changes, etc. but my head would explode. Why don’t we just say that nobody really seems to be exactly sure what “El Petro” is, what it’s worth, how it can be used and/or traded, how much has been sold, and, most importantly, what other changes/ re-configurations will be coming and are there any protections for the buyer (other than oil/whatever, that for now, doesn’t really exist). We already know that the government has raided cryptocurrency miners, jailed them, confiscated their equipment, or extorted them into working for the government.
There are also conflicting versions of exactly who is and isn’t required to accept “El Petro” as payment for goods or services, exactly what those goods or services are, and if you are required to accept them how do you do so since there is no mechanism in place for processing payments with “El Petro”?
At this point, it doesn’t appear that there are verifiable online transactions occurring for purchasing PTR (El Petro). There have been some individuals, much hyped by the government, that have purchase PTR at the office, you know, old-school style. There were photos of a Chinese official leaving the office with his certificate of ownership in hand splashed everywhere. As with all other things Chavismo- related, nobody asked the question,”So, what can that guy do with that piece of paper?”
As far as I’ve been able to confirm (the last numbers available are from 2019) there have been a little over $300,000 sold, that’s dollars, not Petro units. They have done everything possible to generate any kind of sales or use for “El Petro”. In a 2019 highly- questionable move, the government forced “El Petro” into the retirement system. This was a low blow even for the Chavistas.
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