Not Real Players
We’ll head Down The Rabbit Hole in a few for the next segment, “Bullets” , in a few but first…We’ve been telling you for a while that Venezuela is no longer a real player in the global oil business. PDVSA (Venezuela government-owned oil company) is a shell of it’s former self, before Chavismo the envy of the entire oil producing world.
To that point, Argus Media tells us that Colombia and Brazil crudes are unlikely to face competition from Venezuela crude volumes in international markets, even if US sanctions continue to ease, according to key Latin American producers at the Argus American Crude Summit (sound familiar?).
“Those Venezuelan barrels are going to be limited because of the infrastructure that is in place today and the condition. We don’t expect the quality is going to be stable …there’s going to be a lot of volatility quality wise.” according to Ecopetrol Vice President, Padro Manique.
He raises an interesting point. Besides their dilapidated infrastructure’s effect on production volume (Average production for 2022 was less than 625,000 bpd, barrels per day, compared to over 3 million bpd pre- Chavismo) quality is also impacted.
In addition to the discounts PDVSA has to offer due to the nature of most of their crude, which is extra-heavy and difficult to refine, they have to offer extra discounts that are quality-related. It’s not a promising sign that PDVSA uses old tankers from it’s fleet that are no longer sea-worthy for crude storage and that has led to contamination issues. (along with their rusting, decaying pipelines and conventional storage tanks)
Note : In addition to the extra quality-related discounts PDVSA has to offer, they incur expenses related to sanctions- avoidance like expensive ship to ship transfers to mask the movement and origin of cargoes. With the decreased volume and the increased costs it’s hard to see how the Maduro regime makes any money from their vast oil reserves. This ain’t your Daddy’s PDVSA.
Then we have AP telling us that Gustavo Petro, President of Colombia, and Nicolas Maduro, President (Dictator) of Venezuela, met at the Colombia/Venezuela border and signed a new agreement paving the way for trade between the two countries to be truly open for the first time in seven years.
Petro has enlisted Maduro’s help with brokering a peace deal with rebel group ELN. The article said ELN is “present on both sides of the border”. That may be true but a better description would be “ELN conducts paramilitary operations in Colombia and hides out in Venezuela, which has always been allowed by the Chavistas”.
Petro has said he would like to convince Venezuela (Maduro) to rejoin the “Inter-American system of Human Rights”. I know Gustavo and Nico are Marxist brothers in arms and are playing nice but when it comes to Human Rights, Nicolas Maduro will only be part of a Human Rights group that overlooks his ongoing Human Rights violations and crimes against humanity (alleged).
Then we have Oilprice.com telling us that the US is on track to receive 3 million barrels of oil from Venezuela this month, according to documents seen by Reuters.
Chevron, who obtained a limited license from the US Treasury Department to move sanctioned Venezuelan oil, is on track to ship 100,000 bpd (barrels per day), some to it’s refinery in Pascagoula, Ms. , some sold to Phillips 66, and some to Valero Energy.
Eni (Italy) and Repsol (Spain) have a similar deal to Chevron’s USA-bound shipments. Their deal, for Europe-bound oil is, like Chevron’s, for debt-reduction only (at least supposedly,as we’ve covered before).
Conoco is also said to be looking for debt relief from the US Treasury Department as a means to offset the over $10 billion they’re owed by Venezuela. Does anybody really believe that PDVSA is going to ship oil to the US and Europe with these four companies and not get anything in return other that a reduction to their balance sheet?
And we have Law 360 telling us that attorneys for former US representative, David Rivera, and his co-defendant told a Florida Federal Magistrate that the government has improperly frozen their client’s assets making it impossible for them to access funds to hire counsel. In cases involving bribery, money laundering, or other financial improprieties the first thing done is the freezing of assets so I don’t see this going anywhere. (Just another in a long list of PDVSA-related bribery and money laundering schemes)
Now, let’s head Down The Rabbit Hole…
BULLETS : (Not the ammo kind…the presentation kind)
1/ Chavismo promised, and continues to promise, exactly what today’s (and yesterday’s) socialists are promising.
2/ You can’t have an honest discussion about universal healthcare if you can’t have an honest (factual and detailed) discussion about how to pay for it. See chapter 1
3/ US sanctions are not responsible for Venezuela’s humanitarian problems. See chapter 2
4/ PDVSA, Venezuela’s state-owned oil company, was once the envy of the oil-producing world. Today it is in ruins, not because of a downturn in oil prices or US sanctions. 21st Century Bolivarian Socialism destroyed it and if they can kill that they can kill anything. See chapter 3
5/ After promising a more reliable electric grid, Chavismo completely ignored it and now, due to neglect and corruption, electric service has been set back 60 years. See chapter 4
6/ Don’t take access to fresh water for granted. Chavismo has made the situation exponentially worse. See chapter 4
7/ Price and currency controls don’t work…Period! See chapter 5
8/ Cryptocurrency may be the way of the future but Venezuela’s cryptocurrency “El Petro” is, as the Washington Post said, “…might be the most obviously horrible investment ever”. See chapter 6
9/ Venezuela’s food crisis is man-made (Chavista-made) and has been going on since 2014. See chapter 7
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