Mr. Big Oil

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What would oil policy look like in a Leopoldo López presidency?

1. Lots of investment in production, geared toward making Venezuela the world’s top producer

2. Lots of investment in gas, making us the continent’s top gas exporter.

3. Democratize the industry.

4. The creation of a solidarity fund with oil rents to finance poverty-alleviation schemes and a social security system that works.

5. The development of an ancillary-services industry, including the petro-chemical sector.

6. R&D funds for alternative energies.

There’s lots to like here. The trade-offs, however, are nowhere to be found. Because you can’t have lots of rents AND lots of investment AND high oil prices AND puppies and bunnies and rainbows.

1 COMMENT

  1. Why wouldn’t we have high oil prices? And why the margins from la renta petrolera would be lower with increased production? Are you saying that we can actually cause an impact in oil prices?

    • Well, one million extra barrels a day would probably not harm prices much, but six million… I dunno.

      • I think I am factoring in the fact that we won’t be able to increase production that much. But you’re right, if we become that productive it will bring prices down. Either way, it’s impossible to think in such increase. Good luck Leo!

      • If Venezuela were to triple production (for example), prices would NOT drop to one-third. Prices would drop, meaning anyone producing the same amount would lose revenue, but Venezuela would end up ahead. WAY ahead.

        No, when talking about trade-offs, one has to talk about two things. One, how much revenue would the government forgo to reinvest in operations to ramp up production, and for how long. Two, what kind of deals would the government have to offer to foreign (probably private) oil companies to get them to invest big-time, big enough to make that difference. (I presume the terms will be better than what Chavez “offers” them, but there’s all kinds of room in that definition.)

        In theory, it can be one or the other, but in practice, it will almost certainly be some of both. The more you lean on the first one, though, the more you make #4-6 on the list impossible.

        Finally, what the hell does “democratize the industry” mean? That just sounds like politico-babble to me. I can imagine it swaying some voters (sounds like Juan likes it), but it entirely lacks substance from my POV.

        By the way, fat chance becoming the world’s top producer of oil…I just can’t imagine Venezuela ever catching Russia or the Saudis. Top 5, maybe, in about 10 years minimum.

          • The phrase itself, without any details, is so close as to be indistinguishable to me. Just like with oil company terms, there are a lot of different ways that could play out and still arguably mean “democratizing.”

            Offering every Venezuelan a share is a step away from demagoguery, sure, but it still leaves plenty open for interpretation. Does it mean you get a dividend? Does it mean you get to vote for company leadership? Does it mean to get to vote how much oil income goes to the national budget? All/some (and which ones) of the above? And so on. That’s what I’m getting at here. I’m not saying it’s a bad idea…I just don’t know.

          • I don’t think it’s fair to demand so much detail from what is in essence a political speech. At least you know where he stands on the issue, which is more than you can say for some of the other candidates.

          • Juan, based on what I think you said in reply (it’s mixed in with text in the far-right column – you guys REALLY have to fix the layout somehow!), I’m not asking for a manifesto, but two sentences would go a long way here. He doesn’t need to completely define the issue, but framing it would be a big help.

  2. Firstly: let’s put OPEC aside. I don’t care for the sake of this discussion if OPEC is in the picture or not and I think that is irrelevant.
    What would two million extra barrels do to oil prices?
    As you said, tradeoffs are necessary but that goes for more than expenditures. It goes for the way you act on supply.

  3. making Venezuela the world’s top producer = exhausting fields and reducing total output over lifetime, selling more barrels than required at prices that will look cheap in even 2-3 years time

    Lots of investment in gas = similar results

    Democratize the industry = give away control

    finance ….x+y…. that works = meaningless babble

    ancillary-services industry, including the petro-chemical sector = obvious

    R&D funds for alternative energies = good idea if the purpose is to sell tech abroad, otherwise will be far more effective to do this in 10+ years time

  4. Increase in production is not going to happen in 12 months. It’s gonna take time and with the rise of BRICS + Fukushima’s aftermath + unfulfilled promise of green energies, the timing could be perfect to profit from the rise on demand that’s coming.

    Ditto for gas..

    Democratize the industry? What does he have in mind? Will the Venezuelans become actionists of PDVSA?

    The poverty-alleviation scheme will be a CCT or a UCT?

    The petro-chemical sector is a no-brainer…

    It’s smart to use green energies in Venezuela, so we can see our oil abroad instead of wasting it in power generation with thermal power. The problem is that we’re waaaz behind in R&D. The green energy industry in Europe is heavily subsidized and now the chinese are stretching their muscle there, so it’s gonna be tough… I’m all for green energies, but it’s development requires top researchers and labs. It’s gonna take some time before we can do some serious engineering R&D in Venezuela.

    • Heavily subsidized? I am not so sure. I would say nuclear energy is more subsidized than green energy if we count risk factors (insurances and more).
      I see e-cars becoming a meaninful chunk of the market in Western Europe in the next 15 years, even if it still will be a minor one. And one that starts to go, the same will happen in China and the rest. I wonder if rare earths for electronic devices would limit development there, but else I see this as an extra exit valve that will keep pressure off the energy kettle.

      • Any new green energy is much more subsidized than new nuclear, thats clear in the new plants in france the US or China. Now, older plants that germany or Japan is forced to operate to keep the lights on have a more significant risk factor and I can see there being an argument that represents a significant subsidy. But the people to blame there are those who demand lower CO2 output while blocking construction of modern light water reactors… Fukushima was already being shut down and would have been years ago were it not for the contemptible anti nuclear lobby that blocked its replacement. Now, if you just want to switch over from nuclear to coal like Germany is I can respect that but continuing to rely on 1960s nuke plants is batty.

        • I agree blocking for the sake of blocking as they did at Fukushima or with the end depots in Gerrrmany is bad and counterproductive, but the costs depend also on what you want to include in the list; For instance: costs for long term management of waste. Right now in most places people just close their eyes about the real costs of nuclear and other energies.

          Someone some people keep forgetting to put this kind of thing on the bill:

          http://www.spiegel.de/international/world/0,1518,752944,00.html

    • There is little room Venezuela has with oil, one way or the other. Venezuela has 30 million inhabitants. It has the third highest birth rate in South America after Bolivia and Paraguay. The room for manoeuvre is getting shorter by the day. Those who think it is oil or Paraguay conditions should be prepared fo Paraguay conditions only focusing on oil.

      If prices stay at a level as today we won’t move the economy forward without a massive investment in diversification. If prices were to go meaningfully higher, the fuel shift will speed up and this will in turn make prices stabilize again at a lower level, putting us as usual in a crisis.

      I am really surprised by what I see here. I see over and over the same image: alternative energy in Europe heavily subsidized, it will takes much longer than X decades. What are your sources?

      The states are actually giving a lot of money both in oil and in nuclear energy and this is not the opinion of Greenpeace Germany and the Grünen. Every now and then (last time quite recently) they (and that is not just the EU but the States, Japan and Canada) are also pushing into the market vast amounts of oil to regulate prices
      from the ‘th emergency (Fukushima, Libya), which more than other are caused by the big companies themselves stocking oil. You don’t seem to count what that costs to the states.

      Reality is:

      – Subsidies for e-cars have been fased out a couple of years ago in most countries in Europe, including Germany but also the Benelux.
      There are subsidies for stuff like wind parks and solar panels and they are being reduced or just eliminated.

      Funnily, car companies are getting subsidies for “efficient cars” on petrol even if the efficiency is a scam. Nuclear companies haven’t had to pay for real insurance costs because there is no one who wants to pay those prices. See Fukushima and tell me it won’t happen again. A lot of the security costs associated with nuclear energy are paid by the state now.

      For anyone speaking German and perhaps some who would at least see:
      (on e-cars in Europe now but also, en passant, on the subsidies for “economy petrol cars”)

      http://www.zdf.de/ZDFmediathek/#/beitrag/video/1360798/F21-Dokumentation:-Die-leise-Revolution

      In 19:47 you can see how they also measure the latest VW that “economizes” petrol and is sold thus with subsidies: it turns out it consumes a bit more petrol than a VW of similar size that is 20 years old. This is quite dishonest and it is not the only case.

      Actually: the current German government is quite friendly with oil companies and it seems German car companies seem to be quite resistant to changing for e-cars, unlike GM o Peugeot or Nissan and some other companies.

      The most important big subsidy EU governments as well as elsewhere wanted to push forward was about this ethanol, which is an ecologic disaster but product of farmers’ lobbying.

      E-cars have a long way to go, but their market share will increase faster than you think, specially in countries where people don’t do routinely more than 160 km a day and where half of them will take the train if they have to do more than 200km.

      • Another Fukushima? Maybe in Germany or Japan, or in an eastern European RBMK… not in a modern reactor with even so much as a freaking containment dome. I think another such event is unlikely, and still minor in comparison to the number of people killed by the type of brown coal plants germany is currently building. That said Germany has been denied major plant upgrades that reactors of a similar age in the US have undergone so of any OECD nation Germany is at a greater risk of a major problem.

        • No, it won’t be called Fukushima, because it will be a terrorist attack or something else and that is not counted in the bill so far.

          And Germany is phasing out all nuclear plants anyway.
          it will cost dearly but it will be done. The major issue now is the electicity connections, whethe they will be underground or not, plus how many water reservoirs to build where to deal with energy consumption fluctuations.

          Now you go and tell me what are the costs for Fukushima’s district now.
          Anyway, I don’t want to go too much into the nuclear thing here as that was on the side and OT. My main concern here is that Venezuelans seem to think there is much room to do anything with oil.

          If prices go down, we will be in crisis.
          If prices remain, we will at most eke out a life from it, even without Chávez, that’s the dynamics of oil
          If prices fall and fall they will if they ever go up too much again and fall they will sooner than later, Venezuela is a case for the Red Cross.

      • You’re right when you mention that oil and nuclear power are subsidized, but the same goes for green energy. The problem is, that most of the subsidies are given indirectly. In the US, for example, oil and gas companies get a huge tax cut. In Germany they just relax the safety regulations and let the nuclear power plants operate longer than it’s reasonable, not to mention the problem of waste management.
        In the case of solar energy, that is the one I know closely, they set a few years ago a fixed price per KW, manipulating the energy market. That lead to the solar cell boom in Germany. Thomas Friedman mention it in Hot, Flat and Crowded when he compares the American and German energy markets. Yes, Germany is a bit schizophrenic when it comes to balancing its interest (big auto companies vs. green policies), but that’s the norm everywhere.
        The other problem is human capital. I have had the chance of learning about some new renewable energy research done in Germany, like DESERTEC. I don’t think we have anything comparable right now to what you can find in Germany. Our best guys just leave the country and our universities and research labs are weak or non existent. It ‘ll take a boatload of money to revert that.

        • In the US, for example, oil and gas companies get a huge tax cut.

          Really… do tell. Is it the writing off of capital expenditures over time? A loop-hole of some sort? A freebie? I have so wanted to know about this… perhaps it’s the writing off of product produced over the life of the product?

          I dunno… I just dunno.

  5. “Democratize the industry” is clearly code for something.

    We just don’t know what.

    Likely some form of privatization. But the devil is *very*much* in the details on that score.

    • Of course it means Venezuelans becoming shareholders in some form or another. He’s not proposing selling PDVSA to Exxon.

          • Con Yeltsin se vivía mejor!

            Hee hee…

            Surely you get my point, though.

            “Democratizing the oil industry” could turn out to mean anything from a forward looking move to de-ideologize PDVSA and dismantle the petrostate to a catastrophic boondoggle that hands billions of dollars worth of public property to a well-connected handful of (no-kidding)-oligarchs paving the way to the institution of a right wing dictatorship-in-all-but-name of the kind Putin runs.

            Since LL hides behind obfuscatory language, I have no way of judging if this is code for the former or for the latter.

          • Russia:

            What does it mean that the oil sector is booming? It booms when oil prices go up.
            Is Russia’s economy booming? It is certainly much much better than in the nineties.
            it is still very fragile and the attemps at diversification haven’t been that succesful, specially with all the cronism.

            You get a new oil price decrease and it will be a disaster for Russia, even if of a lower order of magnitude than for Venezuela. Remember Russians were having a crisis in late 2008 and 2009, even if not as sharp as Venezuela.
            Luckily for the Russians, they also produce such things as tools for destruction and they have very nice clients, like a Latino guy who has given them 5 billion dollars from 2004 to early 2010 and 2 billion more after that. There are similar willing clients, like Algeria and India and even China (although China is doing heavy reverse engineering on the products, which is going to cost dearly to the Russians in a couple of years, but they just can’t help).

          • Kepler: “What does it mean that the oil sector is booming (in Russia)?”

            Do a search on top oil-producing countries in the world right now. I think you will be surprised – I know I was. Hint: it’s not just about prices.

  6. As far as the oil industry (and any other mined/extracted natural resource industry) the government should strictly do nothing other than charge for the selling of the crude to the private industries that carry out the extraction for whatever it is they want with it. If the money from the sales then goes directly and completely into a stabilization fund from where unconditional cash distribution is exclusively paid out, then all the items, #1-5 and most of #6 are taken care of with no trade-offs, and *many* bonuses.

    I’d have to challenge anyone who proposes anything different to justify the trade-offs required for deviating from the above proposal.

  7. The position any major oil producing country would want to be in is that of Saudi Arabia. They have for a long time had more production CAPACITY than what they need, to maintain sustainability for themselves and at the same time being able to increase or decrease supply, according to world demand at any given time and such obtain equilibrium at the price they want.

    Of course much easier said then done in strict economic terms. But who would dispute that they have not been able to influence (not control) prices for quite some time? Therefore, making statements that because Venezuela may have the largest reserves in the world, it must therefore also be the biggest producer in the world, are meaningless. Again, it’s about CAPACITY to produce, not maximization of supply to the world market, which could easily do more damage than good. But such statements play well to the hypernationalistic ears of a majority of Venezuelans.

    In any case, significantly increasing production capacity in Venezuela is academic for a long time, with or without Chavez. Too much physical damage has been done, combined with insufficient investment, which will make it difficult to just maintain production at it’s current level. To accelerate the process, the industry would have to be at least semi-privatized, letting the big players in under minimum risk conditions. Impossible under Chavez / Chavismo and difficult for the opposition, because such a move, while probably the “best” for Venezuela, will in principle not help to win elections.

  8. This is a prime example of why economics is known as “the dismal science”. No matter how many times something is clearly shown or demonstrated, it is never really clearly shown, much less proven, to anyone and so the debate goes on endlessly.

    Given that prior to Chavez they increased production dramatically and succeeded in tanking prices (and revenues) and later when production was cut back both prices and revenues grew you would think this debate would already have been settled. Or if more evidence were needed why not just look at the production cut backs of 2008/2009 accomplished? Not to mention economic theory 101 explains exactly why increasing production of a commodity with a highly inelastic demand curve, such as oil, generally leads to lower revenues.

    But people who don’t want to accept those conclusions for whatever reason will never accept them because they can always dream up some other factor that they will claim account for the observed data.

    For the same reason here in the US there are plenty of people, including economists, who don’t accept Keynsian economics. And round and round we go…

    • People came out today with umbrellas and it started raining. Obviously bringing umbrellas out causes rain.

      Your “analysis” that Luis Giusti caused the crash in the price of oil of 98 – and not, say, the Asian crisis – would be laughable if it wasn’t disguised in such condescending superiority. As it stands, it’s simply sad.

      • Juan,

        Oil prices were declining fo quite some time. Aren’t you (and whoever) giving too much value to that Asian crisis? Yes, that played a role. And Iraq also increased its production. But anyway: check out oil prices in 96, 97, 98.

        • If OW, or me, or you could explain why the price of oil falls or rises, we’d all be millionaires. But the fact of the matter is that Venezuela is a marginal player in the international oil market. As a price taker, it’s profitable for us to edge our production up and take advantage of high prices.

          Think of it this way: if OW was right and increasing production led to such a fall in prices that it makes you worse off, why is Exxon Mobil investing in more exploration and in more production? Why is Petrobras doing so? Why is Colombia looking to expand as well? Are these people insane? Maybe Exxon Mobil could benefit from having a few economists around, because obviously what they should be doing is producing less oil, not more. After all, demand is inelastic. QED.

          • I am not saying Ow is right or you. I know no shit about this but I also see those “experts” seem to be meando fuera del perol a lot of times as well. I was looking at predictions from the IEA from the nineties and the guys could have really used a random number generator.

            Probably it is good to look at what the big 5 are doing, even though they are not the most transparent organisations anyway (see how they manipulate prices as well by massive amount of containers, etc).

            Saudi Arabia is not making life easier as the US and Europe were begging it to do. Why? On one side it is putting some oil more but on the other it is taking away all kinds of “reductions” it was offering on all kinds of contracts.

            I don’t believe there was one single cause. It will almost always be about a complex set of causes. As I said: oil prices were already low before the Asian Crisis. You can simply ignore that fact and say I am trying to become millionaire. No, I am not. I am just saying I do not single one single event causes it and whatever you do now as an oil policy: you can’t lead yourself by one single parametre either.

          • “As a price taker”

            You are only “a price taker” if you accept to be one. Venezuela played a vital role in the creation of the OPEC which is the only organization that has managed to obtain for its resources a price higher than the marginal cost of extraction. Why this interest in liquidating our oil?

          • It’s not “our oil”, it’s Chávez’s. And I don’t think selling an extra million barrels per day at today’s sweet prices counts as liquidating. See, when something is really expensive, you should try to sell more of it. That way you make a bit more money. Get it?

    • OW- long time no see. Nice to see you are still lurking about. I would have never guessed that the oil opening destroyed world oil prices. Thanks for educating us about that.

  9. Regarding the arguments about selling the oil now or conserving it for decades down the road:

    In 20 years: New technologies could make burning of petroleum products for energy obsolete and the price of oil could plummet.

    Or: New technologies could make petroleum the primary feedstock for artificial food production, causing oil to increase 10-fold in value.

    At the current rate of technological development, any predictions for more than 5 years in the future are probably in vane. What is certain is that having an economy based nearly solely on the sale of a single commodity is dangerous to the point of insanity. Playing Russian Roulette seems safer.

    Any future strategy must encourage diversification of the economy.

  10. It’s pretty easy to say that it’s all political babble and that there is no conception of trade-offs if you just read the headline…

    On top of full transparency and maximum criteria for PDVSA’s human talent, the “democratization” component allows for a minority share of joint ventures (Empresas mixtas) to trade in capital markets, so that all Venezuelans have access to the industry and can directly own the oil projects. Current agreements give the CVP 60% of stocks in the Joint Ventures, but the Law only says that the Gvm’t needs 51%. 9% would be allowed to trade in capital markets.

    Leopoldo’s proposal fits perfectly both in the constitution and in the current Ley Orgánica de Hidrocarburos. Both the Faja and the Crudos Convencionales projects can be developed under the scheme of Joint Ventures (the law is not as restrictive for the development of gas projects). The potential impact in transparency, efficiency, and business orientation of the Joint Ventures can be critical.

    Doubling production in 6 years is technically feasible (+2MM Faja, +1MM Crudos Convencionales, +600M equivalent in gas). You will need to rebuild trust and develop mutually beneficial agreements with the guys that will help you allocate $150MMM in investments. That is why “Trust” is one of the principles of the proposal. However, the 40% for the partners need not be changed (And changing it would worsen the idea of stability in the investment conditions).

    There is a huge potential for job creation and decentralization of economic activity in increasing production. The best times for oil producing regions have been those of maximum production (of course, now it looks like Oficina Nro. 1 all over again).

    Conventional Crude exploitation in the world is declining, and demand is increasing in the developing countries. If you take into account the declining rates of current projects and demand projections, by 2030 45MMbpd must be supplied by new sources of oil (assuming current technologies, estimates by the IEA). This gives leeway for increasing our production w/o undermining price’s current trends. Actually, increasing production and allowing for price stability on a reasonable price range (80$-100$) would disincentivize the rush for developed countries to come up with technologies that substitute oil for alternative sources of energy.

    The rate to production ratio in Venezuela is 200 years – Doubling Irak and Kuwait. The development of alternative sources of energy able to substitute oil may not occur in 20 years, but will occur, and probably not much later. Laziness may make us lose the potential to transform vast amounts of hydrocarbon resources in effective wealth. La edad de piedra se acabó no porque se acabaran las piedras

    Of course, there will be need for “tough diplomacy” in OPEC, but the organization has openly stated in the past that the fundamental criteria for defining quotas should be relative reserves. True, we don’t have the capacity right now, and until we develop it we can’t lead the market. But we have all the right in the world to develop this capacity and our oil potential, and we have all the right in the world to aspire the lead in the international market of hydrocarbons.

    Further discussion needs to be done on the use of oil revenue streams. However, the approach of using oil to overcome poverty and boost productivity in a context of macroeconomic stability seems to be the right one.

    I hope that Leopoldo’s statements lead to open a debate critically needed as we look into the mid-term (especially now that the government is talking about it, it’s time to develop a clear proposal on this). But in general, I feel that dismissing other people’s arguments just because one did not do one’s research properly is both unfair, cynic and plain wrong.

  11. Let us phrase like this… since oil is a non-renewable resource we would like to get a price that reflects this and is quite substantially higher than the global marginal extraction cost of oil.

    And as long as we who give up that resource for ever are not able to get more for the gas-petrol than what the European taxman gets by taxing its consumption we are certainly not getting our fair share of the market value of oil.

    And as long as we make such a poor use of the oil revenues we have not earned the right to extract oil.

    Does Leopoldo even care about these issues?

    By the way how does Leopoldo respond the Kurowski question?
    http://www.eluniversal.com/2011/07/28/responde-y-no-te-hagas-el-loco.shtml

    • And as long as we who give up that resource for ever are not able to get more for the gas-petrol than what the European taxman gets by taxing its consumption we are certainly not getting our fair share of the market value of oil.

      And there you have it.

  12. “Given that prior to Chavez they increased production dramatically and succeeded in tanking prices (and revenues) and later when production was cut back both prices and revenues grew you would think this debate would already have been settled.”

    Yes, because changing Venezuelan production was certainly the ONLY factor in the ENTIRE WORLD that had any influence WHATSOEVER on world oil prices.

    Really, Dan? Show me any other part of the world economy where the market is routinely driven by one supplier with 3% market share, while the other 97% (and 100% of the purchasers) just dangle in the prevailing winds. You really can’t think of just one other thing that might have had an impact?

    • Wait. Was it only Asia? Probably not. Was it only Venezuela? Definitely not.
      Can we try to see the bigger picture? I am reading in Wikipedia Iraq was increasing its production a lot. How much was its share?

      • Depends on when. Here’s a real nice chart to figure it out: http://www.eia.gov/totalenergy/data/annual/pdf/sec11_11.pdf

        From 94-98, for example, when prices were heading to rock bottom, world oil production increased 9.6%. Venezuelan oil production increased from 2.59 MBPD to 3.17. IOW, 10% of the total increase.

        Meanwhile – and this is quite rich – as prices rose from 98 to, well, pick your year – let’s say 2008 – change in Venezuelan production actually accounts for a negative share of the change, because while Ven’s production fell (by 25%, to below 1994 levels), world production ROSE 10%, about 6.7 MBPD. But this debate is “already settled,” so why muddle things with facts?

  13. Juan Cristóbal Nagel, te pregunto: En Marzo de 1999, cuando el Economist escribia sobre un petróleo a 5 dólares y el Jeque Yamani predicaba sus interesadas bolserías sobre la era de piedra que se acabo aun con abundancia de piedras, los petroleros venezolanos hablaban sobre un plan de expansión para extraer 7 millones de barriles, por cuanto eso daba trabajo. ¿Perteneces a ese grupo de iluminados?

    Mientras más ingreso de petróleo signifique más concentración de poder en manos de un cacique, asi sea un Leopoldo, ni loco lo puedo apoyar.

    • No pertenezco a ese grupo pero si suscribo esa teoria. El desarrollo en Venezuela solo lo lograremos si producimos mas y mejor de aquellas pocas cosas que sabemos producir. Es algo que esta de anteojito.

      Ahora, lo que Leopoldo esta proponiendo va en el sentido contrario a la concentración de poder en manos de un cacique. Mayor ingreso petrolero, si, pero repartido entre sus legítimos dueños. Por eso habla de democratizar, de fondos de jubilación, etc.

      • ¿Desde cuándo producimos petróleo? ¿No lo extraemos?

        ¿Te refieres a unos legítimos dueños de los hedge-funds manejadores de nuestras resultas nombrados por Leopoldo o unos nombrados cada quien por los ciudadanos?

        • El petróleo se extrae y se procesa. Ahí hay valor agregado. No entiendo tu punto.

          Tampoco entiendo el punto de los hedge fund managers. Entiendo que eres partidario de los cash outlays. No veo que haya mucha contradicción entre lo que propone Leopoldo y un mecanismo como ese.

          • Juan,

            Probably less than 20 thousand people work in processing that oil in Venezuela (and I know how many work fo PDVSA). The added value is marginal, the amount of people employed on that tiny. A mature petrochemical industry does not exist now in Venezuela. We are basically adding less value than Morocco when people add tomato sauce to the sardines before putting them in tin cans.
            And you want to develop the country by just doing more of that;..as I said: that does sound like playing more the compradores attitude. We will never develop any country like that, nobody has done it.

        • Como me dijo un cubano-americano, por ahí en 1990, cuando hablabamos de la extracción petrolera en Venezuela… “Nooo, chica, el venezolano no hace más que abrir chorro. Esos yacimientos fueron desarrollados por extranjeros.”

  14. Is it political suicide to promise to compensate the thousands of laid-off oil workers in the December-2002 strike?

    • Good question… Answer it with oil price at $30 and oil price at $90. I would speculate that to structure a payment based on price evolution could be something more reasonable and feasible than going for a 100% cash recognition…

  15. OT: New format seems to have killed all video links on the site. Looked into the archives and the video links are gone as well.

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