11-24-2018, 11:51 PM
*** 25-Nov-18 World View -- Socialist Venezuela oil production in 'free fall' as infrastructure collapses
This morning's key headlines from GenerationalDynamics.com
****
**** Socialist Venezuela oil production in 'free fall' as infrastructure collapses
****
![[Image: g180420b.jpg]](http://Media.GenerationalDynamics.com/ww2010/g180420b.jpg)
Oil tanker labeled 'PDVSA - Homeland, Socialism or Death' (PanamPost)
With over one million refugees from Venezuela having fled to other
countries, with dozens of people dying violently in Venezuela every
day, Venezuela's president Nicolás Maduro's Socialist policies seem to
drive the country further into disaster every week.
In 2017, Venezuela was producing two million barrels of oil per day
(bpd). But by September of this year, output had fallen to just 1.4
bpd. According to Fatih Birol, the executive director of the
International Energy Agency:
<QUOTE>"Venezuela production is in a free-fall and we expect
that soon it may go to even below 1 million barrels per
day."<END QUOTE>
Venezuela has some of the largest oil reserves in the world, and
Petróleos de Venezuela S.A. (PDVSA) was one of the biggest oil
producers in the world.
But Socialist dictator Hugo Chávez nationalized ExxonMobil's
Venezuelan assets in 2007, and turned them over to his crooked cronies
who didn't know anything about running an oil company. Venezuela's
oil production has been steadily declining for years. Average oil
production declined dramatically over the past two years, by 12% in
2016 and again by 13% in 2017. Production in December 2017 was 27%
lower than a year earlier. And this year it's fallen even farther.
Late last year, Venezuela's Socialist president Nicolás Maduro
appointed a military man, Major General Manuel Quevedo, head of PDVSA,
with a mandate to increase production and rid the company of
corruption. Quevedo treated the engineers and other professions contemptuously,
even calling them
"thieves and saboteurs." Tens of thousands of employees left the
company, and Quevedo replaced them with soldiers who knew nothing
about the oil industry.
The result has been a collapse in infrastructure, as engineers who
were needed to maintain the busted valves, ripped gaskets, cracked
pipes and so forth were forced to leave. Contractors who were experts
in cleaning up oil spills have gone out of business because PDVSA
wasn't paying them.
The means that oil production is decreasing, and oil spills and
leaks are increasing. PDVSA is unable to clean up spills
after years of neglect, scant investment, and corruption scandals.
Pools of oil are polluting waterways and farmland, causing
a pungent odor.
Urban areas have been hit, too. Early this year, the contents of a
ruptured transport line blackened the Guarapiche River in Monagas
state. A water-purification plant on the river was compromised, and
the authorities shut it down for more than a month. Local schools
canceled classes, and government offices reduced office hours because
water was so scarce.
Socialist Venezuela is in a major economic collapse, following years
of mismanagement and underinvestment in the oil industry, an enormous
humanitarian crisis, and a leader who is addicted to Socialist
policies that enrich himself and his cronies, but destroy the
population, with a hyperinflation rate expected to reach one million
percent by the end of the year, according to the International
Monetary Fund (IMF). Reuters and Bloomberg and Reuters and Bloomberg
****
**** Russia rebukes Venezuela for non-payment
****
Socialist Venezuela would have gone into full-blown default years ago
if not for bailouts by Russia and China. Russia has been bailing out
Venezuela for decades, and in recent years Russia and China have
extended large loans to Venezuela, with the agreement that Venezuela
can service the debt by making payments in shipments of oil.
One of the reasons for the fall in oil production has been that PDVSA
has been forced to starve its own oil refineries of crude oil, so that
crude oil can be shipped to Russia and China as loan repayments.
However, as PDVSA's infrastructure collapses, it's becoming
more difficult to make debt servicing payments even with oil.
It's now emerged that PDVSA has been unable to provide all the oil
shipments that it's promised to Russia. Igor Sechin, a close adviser
to Vladimir Putin and head of Russia's state-owned oil company
Rosneft, flew from Moscow to Caracas over the weekend to rebuke
Venezuela's Socialist leader Nicolás Maduro for being behind schedule
in oils-for-loans payments to Russia.
Possibly even more significant is that, according to reports, Sechin
brought information (I would guess satellite tracking data) showing
that Venezuela was meeting its obligations with China, but not with
Russia.
The problems delaying payments include operational mishaps, such as
refining outages and delayed cleaning of tanker hulls, and financial
disputes with service providers owed money by PDVSA. Reuters and Reuters
Related articles:
KEYS: Generational Dynamics, Venezuela, Hugo Chávez, Nicolás Maduro,
International Energy Agency, Fatih Birol,
International Monetary Fund, IMF,
Manuel Quevedo, Petróleos de Venezuela S.A., PDVSA,
Russia, Rosneft, Igor Sechin, China
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- Socialist Venezuela oil production in 'free fall' as infrastructure collapses
- Russia rebukes Venezuela for non-payment
****
**** Socialist Venezuela oil production in 'free fall' as infrastructure collapses
****
Oil tanker labeled 'PDVSA - Homeland, Socialism or Death' (PanamPost)
With over one million refugees from Venezuela having fled to other
countries, with dozens of people dying violently in Venezuela every
day, Venezuela's president Nicolás Maduro's Socialist policies seem to
drive the country further into disaster every week.
In 2017, Venezuela was producing two million barrels of oil per day
(bpd). But by September of this year, output had fallen to just 1.4
bpd. According to Fatih Birol, the executive director of the
International Energy Agency:
<QUOTE>"Venezuela production is in a free-fall and we expect
that soon it may go to even below 1 million barrels per
day."<END QUOTE>
Venezuela has some of the largest oil reserves in the world, and
Petróleos de Venezuela S.A. (PDVSA) was one of the biggest oil
producers in the world.
But Socialist dictator Hugo Chávez nationalized ExxonMobil's
Venezuelan assets in 2007, and turned them over to his crooked cronies
who didn't know anything about running an oil company. Venezuela's
oil production has been steadily declining for years. Average oil
production declined dramatically over the past two years, by 12% in
2016 and again by 13% in 2017. Production in December 2017 was 27%
lower than a year earlier. And this year it's fallen even farther.
Late last year, Venezuela's Socialist president Nicolás Maduro
appointed a military man, Major General Manuel Quevedo, head of PDVSA,
with a mandate to increase production and rid the company of
corruption. Quevedo treated the engineers and other professions contemptuously,
even calling them
"thieves and saboteurs." Tens of thousands of employees left the
company, and Quevedo replaced them with soldiers who knew nothing
about the oil industry.
The result has been a collapse in infrastructure, as engineers who
were needed to maintain the busted valves, ripped gaskets, cracked
pipes and so forth were forced to leave. Contractors who were experts
in cleaning up oil spills have gone out of business because PDVSA
wasn't paying them.
The means that oil production is decreasing, and oil spills and
leaks are increasing. PDVSA is unable to clean up spills
after years of neglect, scant investment, and corruption scandals.
Pools of oil are polluting waterways and farmland, causing
a pungent odor.
Urban areas have been hit, too. Early this year, the contents of a
ruptured transport line blackened the Guarapiche River in Monagas
state. A water-purification plant on the river was compromised, and
the authorities shut it down for more than a month. Local schools
canceled classes, and government offices reduced office hours because
water was so scarce.
Socialist Venezuela is in a major economic collapse, following years
of mismanagement and underinvestment in the oil industry, an enormous
humanitarian crisis, and a leader who is addicted to Socialist
policies that enrich himself and his cronies, but destroy the
population, with a hyperinflation rate expected to reach one million
percent by the end of the year, according to the International
Monetary Fund (IMF). Reuters and Bloomberg and Reuters and Bloomberg
****
**** Russia rebukes Venezuela for non-payment
****
Socialist Venezuela would have gone into full-blown default years ago
if not for bailouts by Russia and China. Russia has been bailing out
Venezuela for decades, and in recent years Russia and China have
extended large loans to Venezuela, with the agreement that Venezuela
can service the debt by making payments in shipments of oil.
One of the reasons for the fall in oil production has been that PDVSA
has been forced to starve its own oil refineries of crude oil, so that
crude oil can be shipped to Russia and China as loan repayments.
However, as PDVSA's infrastructure collapses, it's becoming
more difficult to make debt servicing payments even with oil.
It's now emerged that PDVSA has been unable to provide all the oil
shipments that it's promised to Russia. Igor Sechin, a close adviser
to Vladimir Putin and head of Russia's state-owned oil company
Rosneft, flew from Moscow to Caracas over the weekend to rebuke
Venezuela's Socialist leader Nicolás Maduro for being behind schedule
in oils-for-loans payments to Russia.
Possibly even more significant is that, according to reports, Sechin
brought information (I would guess satellite tracking data) showing
that Venezuela was meeting its obligations with China, but not with
Russia.
The problems delaying payments include operational mishaps, such as
refining outages and delayed cleaning of tanker hulls, and financial
disputes with service providers owed money by PDVSA. Reuters and Reuters
Related articles:
- Socialist Venezuela's state-owned PDVSA oil company near total collapse (21-Apr-2018)
- Cuba's new president Miguel Díaz-Canel makes delusional promise to continue Socialist revolution (20-Apr-2018)
- Russia considers taking on a huge financial burden - Venezuela (05-Oct-2017)
- Venezuela's economic crisis is hitting Cuba hard (06-Aug-2016)
- Hugo Chávez dismantled Venezuela's businesses on purpose to create Socialist Paradise (29-May-2016)
KEYS: Generational Dynamics, Venezuela, Hugo Chávez, Nicolás Maduro,
International Energy Agency, Fatih Birol,
International Monetary Fund, IMF,
Manuel Quevedo, Petróleos de Venezuela S.A., PDVSA,
Russia, Rosneft, Igor Sechin, China
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
