The memos depict an unfolding economic fiasco and suggest some of Chávez’s key allies – Argentina, Brazil and Cuba – are gravely concerned at Venezuela’s direction.
No wonder.
Analysts have suspected all is not well, citing corruption, broken rigs and unpaid suppliers, but the foreign oil companies still in Venezuela stay largely silent lest they anger the government and find themselves locked out of the western hemisphere’s biggest energy reserves.
[…]a senior manager from Chevron estimated the state oil company’s output at 2.1m to 2.3m barrels per day, well below official declarations of 3.3m.
So you have a government that nationalizes the oil industry and puts a ton of incompetent like-minded individuals at the helm; the most obvious result of such a thing: they can’t product the amount of oil they need to fund their fantasyland….
Oh and this is fascinating, because if this is true, Venezuela is begging for deals with foreign investors. Which is ironic no? Since all they’ve tried to do for the last 10 years is kick foreign & private investors to the curb:
Italy’s ambassador to Caracas, Luigi Maccotta, told his US counterpart that Italian oil company ENI squeezed PDVSA over an Orinoco belt deal in January this year knowing it had no one else to turn to.
The Italians delayed the signing by two days to reinforce the Venezuelan government’s “need for ENI”. Paolo Scaroni, the company’s CEO, then faced down Venezuela’s oil minister, Rafael Ramirez, over changes to terms and conditions.
So as a result, Venezuela is trying to court like-minded countries. And here’s what they realized:
Venezuela’s oil minister, who is the head of PDVSA, travelled to Moscow and Beijing hoping for solidarity deals with allies, only to find the Russians and Chinese as profit-minded as western companies.
Fascinating stuff (Source).
In all seriousness though, this is actually terrible. From the comfort of my living room in Canada, sure I like to see Venezuela’s Chavez suffer. I do not like what this will translate to in local terms: more inflation, more corruption, and life implicitly harder for my family.
