Thursday, January 15, 2009

The truth on Venezuela's oil production

One of the biggest mystery of Venezuela under Chavez is how much oil money do we really get and what he does with it. Since 2003 the estimated numbers from international agencies and those published by the PDVSA monopoly have always clashed, badly at times. Indeed, the PDVSA numbers are only held truthful by chavistas, the rest of the world, including OPEC, has long ago ceased to pay much attention to the numbers published by a company that has not submitted itself to a real audit since it left the SEC (not that the 2003 audit was anything to write home about).

But I digress. Simon Romero of the New York Times has published today a comprehensive and definitive article which speaks VOLUMES about the real situation of PDVSA. It includes:

- rumors that CEO Rafael Ramirez wants to bring back PDVSA to its real business: oil production (Imagine that! Ramirez realizing that selling chicken in markets popular markets could be done better by other folks than PDVSA!)

- a reopening of Venezuela to the hated capitalistic companies that were kicked out as recently as 2007. (Wait a minute! Where those companies not replaced on occasion by Vietnamese, Belarus or other well known oil companies? Were they not as efficient as, say, Exxon, in prospecting for oil fields? Have we been lied to? Naaah!...)

The unavoidable conclusion is that things must be going South for Chavez that he discretely seeks reconciliation to those he abused a year ago. The difference a Wall Street crash makes, no matter how many times Chavez claims that Venezuela is not threatened by the world crisis.

The Romero NYT is a must read. Though you will not escape a couple of killer quotes below:

At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.

But Venezuela may have little choice but to form new ventures with foreign oil companies. Nationalizations in other sectors, like agriculture and steel manufacturing, are fueling capital flight, leaving Venezuela reliant on oil for about 93 percent of its export revenue in 2008, up from 69 percent in 1998 when Mr. Chávez was first elected.
Or as we say in Venezuela, tanto nadar para ahogarse en la orilla (so much swimming to drwon reachign shore).

It is amazing that after 10 yers of bolivarian farce we find ourselves more dependent on oil than AT ANY TIME in our history. I wish Simon romero had followed his logic to the end and added this.

The end

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