We’ll get started with this week’s Venezuela : Down The Rabbit Hole segment, “The Card” in a few but first…BNN Bloomberg reports that Venezuela said it would not be able to pay for dredging equipment, in a letter to Dutch shipbuilding company Royal IHC noting the nation is “financially limited” due to economic sanctions.
The equipment is needed to dig out the main navigation channels in Lake Maracaibo, clogged by silt after years of neglected maintenance by PDVSA (Venezuela government-owned oil company). Chevron has asked Venezuela to clean up the lake so it’s ships don’t run aground as it seeks to double oil production in it’s joint ventures with PDVSA after the Biden administration eased sanctions and expanded it’s licenses in Venezuela.
Chevron has increased production following the sanctions-easing but further increases are limited to being able to ship the oil it produces as storage is limited due to PDVSA’s years of ignoring maintenance to it’s storage facilities. (You have to wonder how interested Venezuela really is in Chevron’s increased production as Venezuela gets no cash from the oil sales of their joint ventures with Chevron as part of the sanctions-easing agreement, debt reduction only.)
So where does this leave PDVSA in pursuit of the two million bpd (barrels per day) oil production target set by President (dictator) Nicolas Maduro? (He set the same goal last year and only achieved a third of that)
Well, we know that Chevron’s production will be limited by Venezuela’s inability to pay for dredging of the critical navigation channels in Lake Maracaibo. What about production other than the Chevron/PDVSA joint Ventures?
Well, production in in these areas will be limited by the degree of progress the Iranians have in rebuilding Venezuela’s collapsed oil infrastructure. A few months ago Venezuela signed an agreement for a few hundred million dollars with an Iranian engineering and construction company to rebuild two of Venezuela’s dilapidated refineries.
A couple of points about this… First, we haven’t seen any updates on the progress of these rebuilding projects which leads us to believe the Iranians may be thinking “Geez, we had no idea it was this bad!”
Second, a few hundred million dollars may sound like a lot of money but most responsible oil analysts say it will take an investment of about $10 billion a year for ten years to restore Venezuela’s long-neglected oil infrastructure. A few hundred million dollars is just a drop in the bucket and PDVSA ie; the Venezuela government is, for all intents and purposes, broke (or as they say “financially limited”).
The Iranians don’t have that kind of money to invest or loan the Maduro regime (Iran has their own economic problems), most foreign oil majors aren’t going to invest in these projects (sanctions aside) until the Maduro regime is gone, having already has assets expropriated by the Chavistas, China has cut off credit to the Maduro regime, and Russia has problems of their own.
Where will the money come from? The outlook isn’t good for PDVSA, who most responsible oil analysts believe is in a death spiral.
Then we have Rio Times telling us the maritime borders between Venezuela and Aruba have been officially reopened after four years. The importation of fruits, vegetables, grocery items, and construction materials from Venezuela will help lower living costs for Arubans. Last month Venezuela opened it’s maritime border with Curacao as well.
Then, on a sad note, we have France 24 telling us that Venezuela’s Orinoco Crocodile is on the verge of extinction, according to Venezuela’s Fudeci Natural Sciences Foundation.
Millions were slaughtered for their skins in the last century and now only about 100 adult females are left in Venezuela. In one brief period from 1931-1934 more than 2 and 1/2 million Orinoco Crocodile skins were exported around the world.
The massive reptiles live in the Orinoco basin that Venezuela shares with Colombia and can grow to a length of 20 feet and weigh close to 900 pounds.
Efforts began in 1990 to breed them in captivity and approximately 10,000 have been freed back into the wild but their numbers haven’t increased overall due to continued killing for their eggs, meat, and skins.
Now, let’s head Down The Rabbit Hole…
Chapter 10, “The Card”…
“Those who surrender freedom for security will not have, nor do they deserve, either one” Benjamin Franklin
and a reprise….
“I’m from the government and I’m here to help” Ronald Regan
Definition : Extortion – To exact or wrest from, to get by threat, violence
The “Carnet de la Patria” (the homeland or fatherland card) was launched as a mechanism to help streamline receipt of government payments and/or benefits. Sounds quite benevolent huh? Well, only if the issuer has your best interest at heart and not their own. Perhaps a closer look is warranted…
Although the “Carnet” was launched by Maduro in 2016 the foundation was laid by Hugo Chavez years before. In April, 2008 Chavez sent a delegation to China to visit the technology hub of Shenzhen and the home of Chinese technology giant ZTE. China was already at the forefront in utilizing technology to further it’s “Big Brother” pursuits. Chavez billed the visit as an effort to help undocumented Venezuelans who might have difficulty opening bank accounts, voting, etc. Sounds well intentioned enough. (What was it Grandma used to say? “The road to hell is paved with good intentions.”)
One member of this group was Anthony Daquin, a technical advisor and delegation member. He was amazed by the Chinese smart card system and it’s vast database. Through the card they could monitor every aspect of a citizen’s life, social, political, and economic behavior. Although still in the early stages of it’s development it was easy enough for Daquin to see the tremendous possibilities as technology advanced. The Chinese were already accumulating data and rating/scoring it’s citizens. Uhh, OK but do you get the same credit for being a dependable, hard-working employee as you do for being a loyal party member? Can you say “Cultural Revolution”? For those who don’t know, the “Cultural Revolution” in China under Chairman Mao had similar ideals and was ultimately responsible for killing millions of people.
Such was the quandary for Daquin. Right behind his amazement and the potential for doing a lot of good was his fear and the potential for doing a lot of harm, evil if you will. He approached government officials with his concerns about the possible abuse of such a system. Their response was quintessential Chavismo. He was detained, beaten, threatened, and eventually fled the country.
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