Hugo Chavez has passed away.
I’m about to be interviewed (in English), live on Deutsche Welle, the German International Channel, by their news program “Journal” at 20:00, Berlin time (GMT+6;, so, that’s 3 PM in NYC.)
Here is the live-stream link http://mediacenter.dw.de/english/live
Hugo Chavez’ final News Conference
Groundbreaking, PetroChina-CNPC refinery for PDVSA heavy oil. It is to be China’s largest. (April 2012)
Over the past few weeks, I have been looking at the state of the Venezuelan-Chinese oil alliance that Hugo Chavez has so fervently championed. The picture that emerges is not what one might expect. Here is an overview, in qualitative terms. [Correction: I originally wrote Ramirez reported that PDVSA produced "60,000" new barrels of Faja oil in 2013. He actually said "20,000".]
A. Structural Changes – Vertical Integration with China
Till now, commentators have looked primarily at the obligations of the Bolivarian Republic of Venezuela (BRV) to send oil to China to repay Beijing’s huge loans. However, there are major changes afoot in the structure of this relationship, no matter who succeeds Hugo Chavez. Developments on the ground in both countries show an energy infrastructure buildup will soon bring significant cross-border vertical integration. Soon, Venezuelan oil will not be shipped to China simply to fulfill financial-and-contractual obligations, but also for locked-in infrastructural reasons.
All indications are that the Chinese side is actively fulfilling the obligations it entered into ca. five years ago (esp. December 2007) to build oil tankers, pipelines and refineries in China in order to import and process Venezuelan heavy crude.
Posted in Chavez, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Hugo Chávez, PDVSA, U.S. oil, Uncategorized
Tagged Heavy crude oil, Hugo Chávez, oil sector, People's Republic of China, Petróleos de Venezuela, Rafael Ramírez, United States
The Supreme Court of Venezuela has just made a rather strange decision. Rather than deciding between the two possible scenarios described in the constitution for the case when a president-elect is unable to take the oath of office on the prescribed day of 10 January, they have instead pronounced a third scenario proposed by leaders of Chavez’ party: There is “no temporary absence” of Chavez, and there is “administrative continuity” (i.e., that there is no new administration since he was the previous president).
The decision by the TSJ [press conference 9Jan 2012] seems particularly amazing as it rejects the constitutional option of declaring Chavez “temporarily absent” that would have kept Chavismo in the presidency without an election for 180 days.
This decision is just as transparently un-constitutional and invented as the rationals of the right-wing Honduran military and congress in 2009 for throwing the president out of their country in his pajamas, rather than pressing whatever grievances or charges they had against him within the framework of the constitution. There is a habit growing in Latin America of “democracies” being unwilling to fight out political crises within the sphere of the constitution and the nation’s institutions.
Here’s the situation in Venezuela: The vice-president and acting president, Continue reading
Oil pumpjacks in Venezuela (TalCual Digital, Caracas)
Recently, I sent off a proposal for a new course, “Problems of the Global Oil System.” The introduction asks rhetorically: “Why Teach About Oil?”
Debates in the U.S. over oil and energy policy often resemble election campaigns, fought out with factoids and unconstrained partisanship. Of course, deciding technical-scientific policy is inherently political. But there are politics and there are politics. In the proposal, I argue that ”Oil’s persistent domestic & global centrality” will extend at least another 25-to-30 years, so teaching about oil is necessary to empower students to participate in forming energy policy democratically.
But, do the facts actually support the conclusion that petroleum’s central role in society–in both domestic and international affairs–will persist for at least 25-30 years hence? Here is the brief argument in the introduction (and the conceptual outline of the course) for your consideration: Continue reading
Posted in Alternative energy, China, Energy and Environment, Euroepen Union, Faja of the Orinoco, heavy oil, international relations, OPEC, Persian Gulf, Resource conflicts, The USA, Transportation, U.S. oil, Uncategorized
Tagged Oil and Gas, seminar, teaching
“Methane gas at 24%, H2S gas (hydrogen sulfide) 4%. We’re dying.”
Late Friday night, 24 August, Rigoberto Colina García, a 29-year-old worker at a lubricant company just outside the Amuay Refinery compound in Venezuela’s Falcon State, had sent this message on his Blackberry. (La República, 28Aug12) Some hours later, at 1:11 AM Saturday, a tremendous explosion killed over 40 people sleeping or working in buildings beyond the refinery’s perimeter, including Rigoberto and four of his co-workers.
This is the worst disaster in Venezuela’s modern oil history, and one of the worst refinery accidents ever worldwide. This week, across Venezuela, President Chavez and PDVSA leadership have been targets of public criticism and outrage.
Clearly, industrial and political policies of PDVSA and the Venezuelan state contributed to this disaster. Meanwhile, yesterday I found a somewhat tangential, but particularly unseemly fact. It seems that President Chavez’ only recent involvement with Amuay in the months preceding this disaster had nothing to do with improving the productivity of the facility, much less the safety of workers and neighboring citizens. No, rather, his involvement was a scheme to bolster PDVSA’s material support for the dictatorial regime of Syria’s Assad in suppressing the popular revolution there. This scheme apparently accounts for the origin of some of the naphtha that burned for four days following the explosion. But first, the facts of the disaster, in so far as they are known. Continue reading
Presidents Chavez and Ahmadinejad met in Caracas in January (here) and June 2012
I was cited a number of times yesterday in a Bloomberg News article by Nathan Crooks in Caracas and Paul Burkhardt in NYC. I reprint it below because the authors’ research further illustrates an issue I’ve often stressed here.
That is: in spite of President Chavez’ rhetoric promising to stand by Presidents Ahmadinejad of Iran (and Assad of Syria, and previously Qaddafi of Libya), he is actually in no position to withstand the U.S. sanctions that could be imposed on Venezuela for aiding Iran. Continue reading
Posted in Chavez, Economic Crisis, Energy and Environment, Faja of the Orinoco, Gaddafi, heavy oil, Hugo Chávez, international relations, Iran sanctions, OPEC, PDVSA, Persian Gulf, Sanctions, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
Tagged Chavez, Hugo Chávez, OPEC, Petróleos de Venezuela, Venezuela
Petrodelta,SA rig in the south of Monagas state, Venezuela (PDVSA 2011 Annual Rept)
In March, U.S.-based Harvest Natural Resources (HNR) had disclosed to shareholders it was in exclusive confidential negotiations with a national oil company (NOC) to sell its 32% stake in Petrodelta SA–a lucrative, mature, medium-heavy Faja oil field in the south of Monagas state, in which PDVSA holds a 60% share. Thursday evening, Harvest surprised observers by announcing they had signed an agreement with the Indonesian National Oil company, Pertamina.
The big question immediately being asked was: “Indonesia? Why not China?” I was quoted at length Friday morning on this question by Bloomberg’s Nathan Crooks in Caracas (See:
Posted in Chavez, China, Faja of the Orinoco, Gaddafi, heavy oil, Hugo Chávez, international relations, Iran sanctions, Libya, Maracaibo, PDVSA, Syria, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
For those who read Spanish: Today Tal Cual in Caracas carried a detailed summary in Spanish by Jose Suárez Núñez of my study, “Bolivarian Venezuela’s Oil Policy & Iran: A Failed Energy Alliance” (which appeared in Middle East Economic Survey’s [MEES] Energy and Geopolitical Risk for May 2012).
Suárez Núñez is the Tal Cual oil columnist, and one of Venezuela´s most senior oil journalists. Here are the links: Continue reading
Posted in Chavez, Hugo Chávez, international relations, Iran nuclear, Iran sanctions, PDVSA, Sanctions, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
What are the factors driving up the price of oil? Some cite fundamentals, others over-active speculation,
Persian Gulf & Middle East (UTex Lib. 2008)
and there are certainly major geopolitical issues in OPEC‘s Mideast and North African (MENA) member states–which is what this post is about.
The Present Saudi Pumping Surge is a Key Element of the US & EU Iran Sanctions Strategy
It is certain that the Iran confrontation will only intensify as the mid-summer sanctions deadline approaches. By July, Washington and the EU hope to significantly curtail Iran’s ability to export oil. In this situation, it is perhaps surprising that prices have not gone higher.
This past week, the normally understated Economist, while noting the Saudis’ extraordinary efforts to pump excess capacity, nevertheless warned that the Iran crisis could trigger a worst-ever oil shock:
Posted in China, Economic Crisis, Euroepen Union, international relations, Iran nuclear, Iran sanctions, OPEC, Persian Gulf, Resource conflicts, Sanctions, The USA, U.S. oil, Uncategorized
Tagged China, Iran, Middle East, Obama, OPEC, Saudi, Saudi Arabia, United States
[Edited Tues 630 EDT] The Negra Hipólita, a tanker operated by an affiliate of PDVSA, should be arriving at the Syrian port of Banias after a 15-17 day voyage from the Venezuelan refinery at Puerto La Cruz (El Universal, 17Feb12).
Syrian tanks are seen in Bab Amro near the city of Homs,12Feb12. Photo Reuters
Puerto La Cruz produces about 187k bbl/day and, the Negra Hipólito, if fully loaded, will deliver 47,000 (47k) tonnes of diesel fuel to alleviate reported widespread shortages of fuel in Syria. That’s about 330k barrels of fuel usable as home heating oil, or as fuel for Assad’s Russian tanks “indiscriminately” shelling neighborhoods, as in the city of Homs. Note:
In Vienna, the U.N. chief demanded the Syrian regime stop using indiscriminate force against civilians caught up in fighting between government troops and Assad’s opponents. ”We see neighborhoods shelled indiscriminately,” Ban told reporters. “Hospitals used as torture centers. Children as young as ten years old jailed and abused. We see almost certain crimes against humanity.” (Time World, Syrian Troops Shell Central City with Tanks. 17Feb12).
What, however, is the geopolitical significance of this shipment? Let’s examine three issues:
- Chavez’ motivations: Why risk sanctions?
- Is this a significant material assistance to Assad’s regime?
- Has Chavez blundered by miscalculation? Continue reading
Posted in Chavez, China, Euroepen Union, European Union, Faja of the Orinoco, Gaddafi, Hugo Chávez, international relations, Iran nuclear, Iran sanctions, Libya, OPEC, PDVSA, Resource conflicts, Sanctions, Syria, The USA, Uncategorized, Venezuela diplomacy
Tagged Assad, Chavez, Hugo Chávez, Iran, Middle East, Puerto La Cruz, Syria, Venezuela