Venezuelan President Nicolas Maduro speaking during the first UNASUR-and-Vatican mediated peace talks with the opposition in Caracas 10 April (Reuters)
Here’s my commentary at Americas Quarterly today, 11 April:
A delegation of foreign ministers from the Union of South American Nations (UNASUR) returned to Caracas on April 7 and 8, securing an agreement to hold peace talks to calm political polarization and protests in Venezuela. The talks are being mediated by the foreign ministers of Colombia, Brazil and Ecuador, plus a Vatican representative.
The UNASUR delegation first visited in late March, recommending that Venezuelan President Nicolás Maduro and leaders of the opposition’s Mesa de Unidad Democrática (MUD) enter into a dialogue. The U.S. State Department had expressed support, as had Organization of American States (OAS) General Secretary José Miguel Insulza.
However, UNASUR’s plan will be complicated by Maduro’s reliance on paramilitaries within his Partido Socialista Unido de Venezuela (United Socialist Party of Venezuela—PSUV), whose loyalty requires his polarizing words and deeds. This conundrum already wrecked a previous dialogue.
In early February, before protests broke out, a highly placed government official explained to me, … CLICK to Continue Reading at Americas Quarterly. Continue reading
Posted in Chavez, Chavez legacy, Energy and Geostrategy, Henry Capriles, Hugo Chávez, Latin America, Leopoldo López, PDVSA, The USA, Uncategorized, Venezuela update, Venezuelan Democracy
Tagged Caracas, Chavez, Chavismo, Hugo Chávez, Latin America, Nicolás Maduro, PDVSA, peace talks, Petróleos de Venezuela, UNASUR, Union of South American Nations, United States, Venezuela, Venezuelan President Nicolas Maduro
Americas Quarterly today carries a followup that to my 29 August piece on Post-Chavez changes at PDVSA.
Drilling rig (PDVSA)
NOTE: During the past couple weeks, while in Maracaibo and Caracas, I was repeatedly told of a new offshore payment mechanism that PDVSA has begun offering to its Joint Venture foreign partners. Venezuelan private sector leaders took credit for the general idea. Continue reading
Posted in Chavez, Chavez lagacy, Chavez legacy, China, Faja of the Orinoco, heavy oil, Hugo Chávez, Latin America and Caribbean, Maracaibo, PDVSA, Trade and Commerce, Venezuela oil, Zulia
Tagged Americas Quarterly, Caracas, Maracaibo, Nicolás Maduro, PDVSA, Petróleos de Venezuela, Twitter, 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
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
A curious announcement in The Tehran Times: “Tehran, Caracas to ink $2 billion oil deal soon” (29 May, web 30 May) followed on the heels of my exposé about this relationship that was published just two weeks prior. The Tehran Times’ piece was brought to my attention by James Bourne, Senior Latin American Editor at Energy Intelligence NYC, who requested a comment. Energy Intelligence has kindly provided GlobalBarrel.com a PDF of Bourne’s piece in their subscriber-only Oil Daily of 31 May, which you can read at this link: Continue reading
Posted in Chavez, Faja of the Orinoco, heavy oil, international relations, Iran nuclear, Iran sanctions, PDVSA, Sanctions, Venezuela diplomacy
Tagged Caracas, James Bourne, Latin America, Middle East, Petróleos de Venezuela, Tehran, Tehran Times, Venezuela
(Greetings! It’s good to be back blogging.) The common perception is that Chinese oil companies in Venezuela are winning big deals on very favorable terms. However, as I’ve stressed in previous posts, Beijing is actually very frustrated not to be getting the deals it expects for new Faja heavy oil fields, especially considering its big investments in the Bolivarian state. More evidence continues to emerge.
From 21-23 November the “10th Meeting of the China-Venezuela High-Level Committee” took place in Caracas at the Hotel Gran Meliá, with something like 400 businesses and state representatives coming from China. Continue reading
Posted in Chavez, China, Energy and Environment, Faja of the Orinoco, heavy oil, Hugo Chávez, international relations, PDVSA, Resource conflicts, The USA, Uncategorized, Venezuela diplomacy
Tagged Beijing, Carabobo, Caracas, China, Petróleos de Venezuela, Rafael Ramírez, Sinopec, Venezuela
Leopoldo López, former Mayor of Chacao, Caracas
(Note: this post was expanded and some corrections made 23 Sept. Also, Part B will treat the “oil angle” – what are the policies of opposition candidates H. Capriles, P. Pérez and L. López as compared to the Chavista policies on PDVSA and on spending the nations’ oil income?)
This past week, the Inter-American Court of Human Rights overturned the administrative disqualification (inhabilitación) of Venezuelan opposition politician Leopoldo López from running as an electoral candidate. (see: decision of the Corte Interamericana de Derechos Humanos, and press release from Lopez’ organization. )
What might be the effect on the October 2012 election? In polls till now, Lopez has run third behind top-runner Henry Capriles, his former political ally and governor of Miranda State, and behind Pablo Pérez, the governor of Zulia State. The Chávez administration has been actively shaping who may run for the opposition ever since President Chavez’ first electoral loss, in the December 2007 plebiscite. This decision is clearly a setback for this policy.
Posted in Chavez, corruption, Henry Capriles, Hugo Chávez, Human Rights, Institutions and rule of law, Leopoldo López, Maracaibo, PDVSA, Uncategorized, Venezuela update, Venezuelan Democracy, Venezuelan elections, Zulia
Tagged American Convention on Human Rights, Government, Henrique Capriles Radonski, Hugo Chávez, Human rights, Human Rights and Liberties, Inter-American Court of Human Rights, Leopoldo López, Manuel Rosales, Miranda (state), Petróleos de Venezuela, United States, Venezuela, Zulia
First, here is an outline of this and the next three or four blogs on this topic:
I. Changes on the Venezuelan side that are enhancing the Chinese role:
a. Chavez’ recent interest in increasing national oil production
b. The existential crisis Chavismo faces from the slow collapse of dysfunctional state institutions, civil infrastructure, and nationalized enterprises
II. Changes on China’s side that enhance its role in Venezuela:
a. China has now loaned Venezuela so much money, and Venezuela so badly needs continued Chinese financing (lately it also feels a need for managerial and technical assistance), that Beijing has been able to insist Caracas not only begin to come through on long-awaited heavy-oil contracts, but that it also comply with certain geo-political and fiscal-accountability conditions. A couple of these are pretty amazing.
I. Changes on the Venezuelan side enhancing the Chinese role: a. Chavez’ new interest in increasing national oil production
One reason for China’s deepening influence in Venezuela is that PDVSA‘s president and energy minister, Rafael Ramirez, is no longer alone in insisting that PDVSA’s level of production has to rise. President Chavez now seems to have gotten behind the need to increase national production. If the price of oil falls significantly (many feel six months at an average of $60/barrel would be ruinous) and PDVSA’s exports per day have not risen to compensate, Venezuela will be in real trouble. Venezuela is extraordinarily dependent on imported goods, from food to machinery for which dollars are needed; and it also must keep up payments to foreign bond holders, for which a steady stream of dollars are also needed. Chavez and Ramirez have every reason to expect that the world’s economic woes will lead to a decrease in oil demand over the next year or two, and this of course can lead to significantly lower prices. These fears were not apparent in the recent past. It has been more or less a tenent of Chavista faith at elite-and-professional levels that the price of oil will never again fall significantly. I have been told this many times. Continue reading
Posted in Chavez, China, corruption, Economic Crisis, Faja of the Orinoco, heavy oil, international relations, PDVSA, Resource conflicts, The USA, Venezuela diplomacy, Venezuela update
Tagged Bolivarianism, Caracas, Chavismo, China, Energy, Eni, Heavy crude oil, Hugo Chávez, La Campiña, peak oil, Petróleos de Venezuela, Rafael Ramírez, States of Venezuela, United States, Venezuela