They're Catching On
With no Venezuela : Down The Rabbit Hole segment we still have plenty to get to so…. Oilprice.com had a piece titled “Venezuela’s Vast Oil Wealth Could Become The World’s Largest Stranded Asset”. It would seem that our contention that Venezuela is, for all intents and purposes, out of the oil business is gaining traction. The article referred to many of the things we’ve been telling you for a while now. Here are a few of the highlights (or low lights, if you will) :
Political purges, an exodus of skilled labor, chronic malfeasance and corruption, harsh US sanctions, and a dire lack of capital are all responsible for Venezuela’s oil industry falling into wreck and ruin.
Venezuela’s petroleum production has collapsed, 1998 – over 3 million bpd (barrels per day), 2022 – 615,000 bpd (and it’s been lower)
The environmental harm is so severe it will take billions of dollars and years to clean up existing oil spills with the damage in many places , such as Lake Maracaibo, considered irreversible.
External experts believe it will take $110 billion – $250 billion (We generally use the low number but either way it’s billions of dollars a year that Venezuela doesn’t have and can’t get) to rebuild Venezuela’s energy infrastructure (and at least a decade)
Only Canada’s oil sands ranked as more carbon intensive, which should be a concern going forward to the environmentally conscious (The Chavistas are not in that group).
Only refineries specifically configured to process those types of petroleum (heavy and extra- heavy crude) can accept it as feed stock, thereby limiting the market.
Energy super-majors, Total and Equinor, chose to exit Venezuela in 2021 despite the decision incurring substantial losses from both companies …a corrupt autocratic regime with a history of nationalizing oil assets, essentially makes Venezuela uninvestable (spell check says that’s not a word) for foreign oil companies.
It’s good to see others catching on to the realities of Venezuela’s oil business (or lack thereof). The Chavistas have destroyed Venezuela’s oil industry and nobody’s coming to the rescue.
Then we have CNN reporting that the US State Department’s Special Presidential Envoy for hostage affairs, Roger Carstens, quietly traveled to Venezuela as efforts to bring wrongfully detained Americans home continues. Carstens told CNN “While we have work to do, I’m left feeling optimistic.” This process should go on almost indefinitely as Maduro’s strategy is to keep a healthy supply of political prisoners for bargaining chips. One hostage freed…two more detained.
And we have Reuters telling us that PDVSA (Venezuela government-owned oil company) has assigned a third cargo of crude oil for export to the US. The first is currently on it’s way to the US, the second is delayed due to a lack of dredging in the Lake Maracaibo navigation channel, and the third should leave shortly after the second is underway. All three cargoes are believed to be from oil storage and do not necessarily reflect a production increase. (It’s kinda’ the Venezuela version of the Biden administration tapping the US Petroleum Reserves)
Then we have Merco Press reporting that Nicolas Maduro announced a major improvement in Venezuela’s nutritional deficit saying only 7.7% of Venezuelans are malnourished. He did not disclose the source for his nutrition numbers and the last number we saw was malnutrition at 35%. He also reiterated Venezuela’s GDP growth was over 15% and the last reliable numbers we have seen range from 6% – 8% …. just saying….
And we have Daily Mail telling us that Dinorah Figuera, the new president of the Venezuela opposition’s 2015 National Assembly in exile and Nicolas Maduro’s newest foe, is emblematic of the over 7 million (and counting) Venezuelan migrants who have fled 21st Century Bolivarian Socialism.
She left behind her family and medical career in 2018 and has been making ends meet as an in-home caregiver in Valencia, Spain. One day, just another struggling Venezuelan migrant…the next day, the face of the Venezuelan opposition…at least for now.
Then we have Mehr News Agency telling us that Nicolas Maduro says he has spoken with the presidents of Brazil, Colombia, and Argentina about forming a new regional organization…”to create new poles of power…allied to Russia and China…community of shared destiny (Xi Jinping) … multi-polar and multi-centric world (Vladimir Putin)”…I can hardly wait.
And we have Aljazeera reporting that teachers, retirees, and worker’s unions marched in at least six Venezuela cities to demand better salaries amid rising inflation. (These protests have been going on for a while now) The monthly minimum salary for a public school teacher is about $10 while university professors earn between $60 – $80 a month. PSUV ruling party (the Chavistas) Vice President, Diosdado Cabello, went on state TV and blamed sanctions. (as the Chavistas always do)
Then we have Oilprice.com reporting that PDVSA has suspended most of it’s oil exports for a review of contractual terms that will be conducted under the new head of the company. Reuters reports the review aims to make sure there will be no payment defaults. (Venezuela has increasingly used middlemen in an effort to evade sanctions) Skeptics, like yours truly, might think that after Chevron’s shipments to the US there simply isn’t more oil available.
And we have LBC reporting that three people convicted of attempting to assassinate Venezuela President, Nicolas Maduro, received 30 year prison sentences, which is the maximum allowed. The charges were terrorism, treason, and forming a criminal gang. Once again, skeptics might think the maximum sentences were due more for embarrassment than any assassination attempt as when this alleged plot took place the assembled soldiers ran away from Maduro, not towards him to protect him, as the explosions occurred…It was absolutely hilarious.
That will do it for the week. We’ll be back Monday with our next Venezuela : Down The Rabbit Hole segment, “Voting With Their Feet”, as well as more current news. Until then…Have a great weekend everybody!!!
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