Lula and Petrobras
I had a pleasant exchange with an intern – in the end a class of interns – at the Brazilian newspaper ”O Estado de São Paulo“ a couple of weeks ago. The questions were insightful. I tried to answer in an informative and direct manner. Indeed, things are not going well at Petrobras lately, and looking at the politics of Pdvsa and Petrobras next to one another is a useful exercise. Here’s the interview.
1) Do you agree that PDVSA and Petrobras have both had political mishaps in their administrations? Why?
Yes. Hugo Chavez used Pdvsa as the “goose that lays the golden eggs.” However, he took so much from Pdvsa — especially to support his frequent election campaigns, before each of which he increased public spending to win votes — that the “goose” has been left to starve.
Chavez’ revolution was, in his own words, an “oil revolution” and “oil socialism.” However, he did not understand how to run the national oil company. While he distributed largess from the country’s oil wealth to the poor, he was incapable of introducing a new, higher productivity of labor in Venezuelan society, which is what any real social revolution requires for success. He left the country in a very dangerous situation with a shortage of foreign exchange. If the price of oil falls further due to a US & EU accord with Iran and/or an improvement in the oil production situation in Libya, and Iraq, then Venezuela will face a deep crisis.
Petrobras too, under Lula, began to be viewed as a cash cow after it discovered the pre-salt. As a president. Lula was much more competent organizationally and in economic matters than Hugo Chavez. However, Continue reading
Posted in Brazil, Chavez, Chavez lagacy, Chavez legacy, Dilma, Faja of the Orinoco, Hugo Chávez, Latin America, Latin America and Caribbean, Lula, Oil prices, OPEC, PDVSA, PDVSA weakness, Petrobras, Pre-salt, rentismo, Venezuela oil
Tagged Brazil, Chavez, Hugo Chávez, PDVSA, Petrobras, United States, Venezuela
Inversiones energéticos de China en Latino américa. Nota que Venezuela está en cuatro lugar, en contra de las intenciones iniciales de Beijíng en 2007-08. HAZ CLICK para magnificar. (Grafico por T.O’D.)
[English readers: This post is an analysis I did in Spanish for Petroguía 2014 - the annual hard-copy guide for the LatAm petroleum sector - of China's oil and gas investments in LatAm and the Carribean. For Beijing's other investments, or a presentation, etc. drop me a line. ]
NOTA: La siguiente es mi análisis publicado en Petroguía 2014, la guía anual para el sector petrolífero latinoamericano. Soy agradecido a los directores del Petroguía por haberme permitido publicar el artículo aquí. El artículo es una resumen de una investigación que hizo sobre todas las inversiones de China en Latino américa. Si tienen interés en una reportaje o presentación detallada, por favor contactarme.
China y América Latina: ¿Quién gana y quién pierde?
Sumario. El mercado de hidrocarburos ya no está en el norte de América sino hacia el este, y la mejor estrategia de intercambio con esa plaza la lleva Brasil, mientras que Venezuela y Argentina están a la zaga.
Por Thomas W. O’Donnell
El petróleo y el gas que exportará América Latina en las décadas venideras irán mayormente a China y otras partes de Asia. Y eso es por el efecto combinado de menores necesidades de energía importada en Estados Unidos, gracias a la utilización de los nuevos métodos de fractura hidráulica (fracking) que produce cada vez más petróleo liviano, y por el tope que ha alcanzado su demanda doméstica. Continue reading
Posted in Chavez, Chavez lagacy, China, heavy oil, international relations, Latin America and Caribbean, Oil supply, OPEC, PDVSA, shale oil, The USA, Tight oil, Trade and Commerce, U.S. oil, Venezuela oil
Tagged Beijing, Business and Economy, Chavez, China, Energy, Heavy crude oil, Hugo Chávez, Latin America, oil sector, OPEC, PDVSA, United States, Venezuela
Back in April, Brazil’s Folha de SaoPaulo ran an article entitled: “The Future of Venezuela Depends on China“ and highlighted this quote: Translation: “If Maduzo wins, he’ll have to regain the confidence of the Chinese.” TOM O’DONNELL, petroleum consultant
Indeed, it is now clear that the short-term strategy of the post-Chavez Maduro-Cabello administration was to escape the country’s severe dollar crisis by convincing Beijing to extend it a $5 billion cash loan alleviating food-import shortages before 8 December elections. In particular, the cash was to fund a new dollar exchange system (see El Nacional,25 Sept 2013). Continue reading
Posted in Chavez lagacy, Chavez legacy, China, Faja of the Orinoco, heavy oil, Hugo Chávez, Latin America and Caribbean, PDVSA, Uncategorized, Venezuela diplomacy, Venezuela oil, Venezuela update, Venezuelan elections
Tagged Beijing, Caracas, China, Hugo Chávez, Maduro, Nicolás Maduro, PDVSA, Venezuela
PDVSA oil rigs in Venezuela (TalCual)
Throughout 2012, and especially after President Hugo Chávez’ death in early March 2013, Venezuela’s national oil firm, Petróleos de Venezuela S.A. (PDVSA), has taken measures beyond anything done in the past decade to raise its lagging production. While the likely impact merits cautious analysis, the drivers of the Bolivarian Republic’s scramble for increased oil revenues are clear. … Continue reading
Posted in Chavez, Chavez lagacy, Chavez legacy, China, Faja of the Orinoco, Gaddafi, heavy oil, Latin America and Caribbean, Libya, Maracaibo, Oil prices, OPEC, PDVSA, PDVSA weakness, The USA, U.S. oil, Venezuela oil, Zulia
Tagged Beijing, Carabobo, Caracas, China, Heavy crude oil, Hugo Chávez, Nicolás Maduro, OPEC, PDVSA, Petróleos de Venezuela, president hugo chavez, Rafael Ramírez, South America, United States, Venezuela, Venezuelan
I’m invited to deliver a public lecture Wednesday, 24 April, at 3:30 in New York City at The New School University‘s Graduate International Affairs. This will be a critical examination of the legacy of Hugo Chavez’ “oil socialism” as an “alternative developmental model” for Latin America. Continue reading
Posted in Chavez, Chavez lagacy, Chavez legacy, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Henry Capriles, Hugo Chávez, Institutions and rule of law, international relations, PDVSA, PDVSA weakness, Venezuela update, Venezuelan Democracy, Venezuelan elections, Venezuelan weak institutions
Tagged Hugo Chávez, Latin America, New York City, The New School, Venezuela
Deutsche Welle, the German international TV service, interviewed me on the
legacy of Hugo Chavez on their live evening news broadcast Journal from Berlin. I tried to relate two, strikingly contradictory aspects of President Chavez legacy:
The outpouring of sincere affection for him from the poor and many others in Caracas, which the world is witnessing, as the embodiment of their liberating political awakening. And, in contrast, the utter shambles in which Hugo Chavez, as a practical political leader of 14 years, left the Venezuelan state and economic institutions, including PDVSA. My segment comes at 4:08 minutes into the video stream here:
Posted in Chavez, Chavez legacy, Chavezsuccession cancer, Germany, Hugo Chávez, Institutions and rule of law, PDVSA, Venezuelan Democracy, Venezuelan elections, Venezuelan weak institutions
Tagged Berlin, Caracas, Deutsche Welle, Hugo Chávez, PDVSA, United States, Venezuela
Venezuela’s troubled national oil company, PDVSA — Post-Chavez Reforms ?
What’s the future of PDVSA post-Hugo Chavez? My comments to Platts Energy writer Mery Mogollon were quoted in detail today in Oilgram News. A JPEG image is below (click it to enlarge). My thanks for permission to post it here. Continue reading
Posted in Chavez, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Hugo Chávez, international relations, PDVSA
Tagged Hugo Chávez, PDVSA, Petróleos de Venezuela, Venezuela
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
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