That Sinking Feeling

 Since we wrapped up our Venezuela : Down The Rabbit Hole segment yesterday it’s all current news today so let’s do it.

 Claims Journal reports that more than half of the 22 oil tankers in Venezuela’s fleet are so run down that they should be immediately repaired or taken out of service, according to a PDVSA (Venezuela government-owned oil company) internal report shared with Reuters. (Is anybody surprised by this?)

 The report by PDVSA’s maritime branch said years of deferred maintenance (ignored maintenance?) had left the entire fleet with “low levels of reliability”, at risk of spills, sinking, fires, collisions, or flooding. “The ships currently lack seaworthiness classification and certification by flag nations”. We’ve previously told you that most of the PDVSA tankers only do transport in national waters due to lack of certifications and/or insurance.

 The deterioration of the fleet has forced PDVSA to charter tankers to move it’s oil. The report recommended withdrawing 5 tankers from service, sending 7 to shipyards for major repairs, and installing transponders (Forgive us for laughing about this one as tankers carrying Venezuela crude typically turn off their transponders to avoid detection due to sanctions and/or possible seizure from creditors), fire extinguishers, and communication equipment in others. Five PDVSA tankers are past their recommended 30 year lifespan.

 Plans to send tankers to dry docks have been affected by lack of payment to shipyards and providers. Once again, this should surprise absolutely nobody. We’ve reported previously that PDVSA tankers are refused entry into many ports due to lack of payment to maintenance companies responsible for cleaning and other services required for port entry.

 PDVSA leased 41 vessels last year paying double the market rate to tanker owners willing to work with Venezuela despite US sanctions imposed in 2019. Many tanker owners also take issue with PDVSA wanting them to turn off their transponders so the shipments can’t be tracked.

 PDVSA’s current corruption probe (purge?) could cause further issues because, as on executive said (speaking on condition of anonymity of course), “All contracts are frozen”. PDVSA and PDV Marina did not respond to requests for comment.

 Then we have Rio Times telling us that OVCS (Venezuela Observatory of Social Conflicts) released a report showing the number of protests in Venezuela was up 47% in the first quarter of this year compared to 2022, which reflects the deterioration of living conditions.

 The organization recorded 2,814 protests between January and March, an average of 31 per day. The majority were labor/wage related which is understandable since the last increase in the minimum wage was in March, 2022 meanwhile inflation for 2022 came in at 234% and inflation for 2023 is projected to be 400%.

 This might be a good time to tell you about one of those “Be careful what you wish for” deals. A few years ago when Venezuela was in the throes of it’s four year-long period of hyperinflation (the second longest on record in the world) it was put out there that Venezuela might be (at the time) the only country in the world where people almost dread an increase to the minimum wage. This was due primarily to the government announcing a minimum wage increase and before it was even put into effect prices had already increased negating any benefit of the increase in wages. By the way, the government was averaging five increases to the minimum wage per year during that period.

 Then we have the Miami Herald telling us that Venezuela opposition leader and former “interim President”, Juan Guaido says he was told to leave the country (Colombia) or be handed over to the Maduro regime…So, I guess Colombian President, Gustavo Petro, wasn’t lying when he said Guaido wasn’t deported…but he would have been if he hadn’t gone to Miami.

 And we have WLRN telling us that critics of Juan Guaido say his foray into Colombia, then on to Miami, was a stunt to revive his waning political relevance.

 Guaido said that although there have been reports of his candidacy in the opposition primary on October 22nd he is not planning on running in either the primary or the general election, which isn’t officially scheduled yet but is purportedly going to be in 2024.

 For now, he plans on meeting with members of Congress in Washington DC and one of his chief messages will be to not trust Gustavo Petro as a mediator (between the opposition and the Maduro regime). “President Petro has put himself on the side of the Maduro dictatorship.”

 Then we have Argus Media telling us that according to PDV/PDVSA data, April oil production was 820,000 bpd (barrels per day).

 PDV described the figures to partners and analysts as “approximate” leading some sources to doubt the report’s veracity. (We always doubt their numbers and they’re always overstated when we finally get third party verification)

 Last month PDV and a Caracas-based energy firm put oil production between 770,000 – 785,000 bpd. Argus put the number at 700,000 bpd. Now you can see why you always have to wait for third party verification. When the real numbers come in they’re usually 10-20 percent lower. You can also expect lower production going forward (although I doubt it will be reported by PDV).

 Maduro announced on May 1st, International Workers Day, he ordered PDVSA president, Pedro Tellechea, to surrender 50 oil wells to a newly created “National Workers Compensation Fund” to pay for workers benefits and severance payments.

 Maduro always does this stuff, it sounds good, makes a big PR splash, then amounts to nothing. Case in point…Maduro announced grid coordinates for blocks in the oil fields that would be designated to support and guarantee his utterly fraudulent (and utterly failed) cryptocurrency, “El Petro”. We later found out that these blocks had yet to be developed.

 That will do it for the week. We’ll be back Monday with our next Venezuela : Down The Rabbit Hole segment, “The Card” and, of course, more current news. Until then…Have a great weekend everybody!!!

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