Remember the good old days when Venezuela gave away heating oil to the poor in the U.S. of A. like it came in CLAP boxes? Seems like that program is the latest casualty of Venezuela’s (and PDVSA’s) economic troubles.

According to a report by AP’s David Sharp, CITGO is skipping its assistance for the second year in a row to a program known as Joe-4-Oil  that provides heating oil in several U.S. states at discount prices. The program is run along with the non-profit group Citizens Energy Corporation.

The Chairman of Citizen Energy (and former U.S. Congressman) Joseph P. Kennedy II told AP that he was hoping for a last minute help by CITGO, without any luck. He hinted that Venezuela’s economic woes are to blame here: While this is not good news, it certainly isn’t surprising”. The program was also suspended in 2009, blaming “falling oil prices and the world’s economic crisis”.

The Joe-4-Oil website says that “it’s not currently accepting applications for assistance.” CITGO’s own assistance program’s website is still active, but its last news update is dated February 2014.

CITGO used the program as a good PR strategy for the late comandante eterno and its own brand. The company has since expanded its branding push to other areas, from ñangara rappers to a mural in the Bronx unveiled last September by Foreign Minister Delcy Rodriguez. BTW, the mural came with its own video security system to protect it from possible acts of vandalism. Looks like money well spent.

Regardless of the crunch, PDVSA has not stopped spending dough on self-promotion: During the recently finished World Baseball Classic, the State oil company was one of the two sponsors of the Venezuelan national team. Wanna know the other? El Gobierno Bolivariano.

21 COMMENTS

  1. How about Juancito (Trucupey) 4 oil? Right now there is a gasoline crunch in Venezuela, due to poorly- maintained major refineries, except for Amuay, which just suffered a major fire, and to the halving from needed 150m bbls./da. of needed gasoline imports (must make those April bond payments!).

    • Citgo is as good as gone. The bond swap did not have the expected results as only about 25% of the bond holders accepted the deal. They still have their bonds secured by 51% of Citgo.
      Oil prices have most likely gone as high as they will go in the foreseeable future, barring an unforeseen supply interruption. US shale drillers are going wide open. Advances in drilling techniques and fracking have made oil profitable in some instances below $35 per barrel. Most of this less expensive oil is in the Permian basin and production increases will replace the OPEC production cuts. My opinion is that oil will be playing with the $40 mark within the next year.
      At the same time Venezuelan production is in a steady decline. The nature of Venezuelan heavy oil requires sustained maintenance to maintain production. US oil service firms are owed Billions of Dollars and have stopped most maintenance activities as a result. The multi year lack of investment in the Venezuelan oil infrastructure will lead to continuing deterioration across the entire industry.
      Maduro’s best friend China will still haul the oil promised them for debt service away on a regular basis. Leaving less oil available to convert into Dollars.
      There is no question of if Venezuela loses Citgo. The only question is when. I am sure the company will have had every last Dollar or Bolivar bled from it by then.
      The US refineries and the retail fuel operations, including the real estate are worth more than the first lien bondholders are owed. They have no incentive to negotiate any type of payment modification. Next in line will be the Russians that hold the mortgage on the other 49%.
      It doesn’t matter what bonds are defaulted. All assets will come into play. Any equity in Citgo that exceeds the current bonds will be sought from bondholders that hold defaulted bonds.
      There is no way Venezuela can avoid default. This not an opinion a much as a fact.
      Falling foreign reserves and decreasing production coupled with low and possibly lower oil prices spells disaster.
      Many analysts have expected a default on Venezuelan sovereign debt for more than a year. Depleting foreign reserves to pay interest at the expense of human suffering due to the lack of food and medicine is irresponsible and borders on crimes against humanity.
      I don’t celebrate or take any comfort in this reality. I want to see the regime gone, but I know the people of Venezuela will be subjected to prolonged oppression, violence, starvation, suffering and death before the collapse. Maduro will stuff the last pork chop in Venezuela into his fat face before this regime comes to an end.
      It is almost like watching an alcoholic have to hit bottom before he can be redeemed. The difference is that Maduro and his criminal cadre know that prosecution, jail and if I had my way execution, is there future once there grasp on power is gone.
      The US government has been diligent in their efforts to find and seize assets that have been stolen from the Venezuelan people. To date they frozen assets account for a very small fraction of the illegally taken wealth. I do not know how these assets will be handled in future litigation.
      I am a peaceful person by nature that abhors violence. I would fully support US involvement in partnership with other OAS nations to forcefully remove this regime from power and rescue the people of Venezuela from the modern day internment camp your beautiful country has become.
      The plight of the Venezuelan people is never far from my thoughts and I pray that his nightmare comes to an end as soon as possible.

      • I can’t speak for all Americans. But my appetite for freeing another nation of its brutal dictator at the expense of American lives and dollars is frankly zero.

        Iraq is a mess.
        Afghanistan is a mess.
        Syria is a mess.
        Egypt is a mess.
        Libya is a mess
        Tunisia is a mess
        South Sudan is a mess

        All of the above were nations or areas that were recently ruled by either repressive strong men or groups. All have been in, or still are, a state of revolt and civil war. None have yielded anything close to what we would consider a progressive and free state, with liberties, safety, and economic freedoms and guarantees. Either they are still at war, or have revered to strong man/party dictatorship model.

        I fail to see why VZ is going to be any different. The people of VZ voted for this madness again and again. They bought the bullshit that Chavez was peddling, so now they pay for it.

        We here in the US are going to be busy enough over the next few years trying to digest the crap that the GOP managed to sell to the scared white idiot voters in 2016. Please stop expecting us to bail your ass out of your self inflicted troubles.

        • The only two triggers for Venezuela are WMD’s and terrorism, none of which are in the cards right now. It has been like this since 9/11. Trust me on this.

  2. Strangely, the PSF are now nowhere to be found speaking about Venezuela lately, even after one is running as the President of a major European country and the other is the leader of a major party in another major European country.

  3. From the Wikipedia article on Joseph P. Kennedy II:
    Kennedy has been criticized for the salaries paid to himself and his wife.[42] In 2012, as CEO of Citizens Energy and related organizations, Kennedy was paid a total of $796,000 in compensation, and his wife was paid an additional $344,000 as Director of Marketing.[43] [follow the footnotes: page 8 from the source of footnote 43]

    I am reminded of a Tom Lehrer song: The Old Dope Peddler.
    Every evening you will find him,
    Around our neighborhood.
    It’s the old dope peddler
    Doing well by doing good.

    After all, shouldn’t someone who is doing so much good be adequately compensated for all the good he is doing? We should nominate Joe II for the Nobel Peace Prize. After the Derwick clan, of course.
    🙂

    https://en.wikipedia.org/wiki/Joseph_P._Kennedy_II

  4. We here in the US are going to be busy enough over the next few years trying to digest the crap that the GOP managed to sell to the scared white idiot voters in 2016.

    Regarding the un-crap that the Democrats try to sell, I would like to point out that Citizen Joe, the subject of this article, is a Democrat who represented Massachusetts in Congress for 12 years. How do you classify “scared white idiot voters” who voted for Obama in 2012 but voted for Trump in 2016- such as over 10% of the voters in my hometown? Just sayin’.

    I would agree with you that your list of above countries do not whet appetites for intervention.

      • I used to think so. But then I’ve been told I am an idiot. I guess I should listen to my intellectual superiors who seem to have it all figured out.

  5. Joe and his wife went to Ccs last year to prod Maduro…no luck. Joe is a scumbag, that we know. Regarding OP comment “The US government has been diligent in their efforts to find and seize assets that have been stolen” … FALSE. TOTALLY FALSE. It’s the other way around, THE U.S. HAS TURNED BLIND-EYE TO VENEZUELAN MONEY LAUNDERING. We welcome their money as it props up our economy. Look at Southern Florida.

    When TEA and his pal where recently flagged, the feds listed the seized assets which where far from complete as the media uncovered many more assets in Miami and Boston. The feds did not do due diligence. Nothing new here, the feds have dropped the ball with Venezuelan criminal cases time and time again, over and over again. False prosecutions and bungled prosecutions are common going back to the beginning of the century.

    Ron Larson is correct. Wilsonian foreign policy may be over with Trump admin. The fact that Mexico is taking the lead is a step in the right direction. Brasil and Mexico have to step up to the plate. We have to wait for Santos to leave office without a chosen successor. We also have to keep Brasil in our orbit meaning Lula cannot become president again. If this happens, then the path to military intervention is open. Military intervention does not mean war nor fighting. It will be up to the Venezuelans to decide if they want to fight. Having said all this, Venezuela is not a priority much less a military priority. Global whack-a-mole assures that.

  6. Yesterday night for the first time in my knowledge the topic of Venezuela was touched upon in a Chass Rose interview , the comments were more raw and knowledegeable than usual for an american forum , it ran for 14 minutes……, the description of events surrounding the suspension of the rally to miraflores and the start of dialogue is basically accurate…..also the implications which such suspension had in creating todays mood of happless depression in the opposition …..The change in strategy was the result of both the Vatican and US State Dept Career Officials fear of the violence which would result from the rally and the latters ‘doubt about the leadership of the MUD’. Both people being interviewed agreed that this time things had grown so serious that something had to be done but the situation was very complicated and no one was sure as to what had to be done …one of them was surprised that the atomic bomb strategy of cutting short venezuelan oil imports to the US was not on the table (which would have a disastrous effect on the regime) perhaps because of fear of the precedent such measure would create…..!!

    While they admitted that a blow up did not seem likely at this time (people being so apathetic and depressed and consumed by meeting their daily needs) , a festering anger continued to run deep so one never knew when unexpectedly some small spark might provoke an all out explosion ….!!

    The regime despite all desperate efforts to round up the money needed to make this april bond payments is still a couple of billions short and as of today no sign of where it might get the money needed to make that payment !! Pdvsa as predicted is trying to monetize the sale of part of its existing mixed company holdings in La Faja but hasnt yet got the money…!! This april is going to be an intersting month …!!

    • Bill,
      Why empty the treasury of foreign reserves when default is imminent? I can’t figure out the reasoning. International law gets complicated when sovereign debt comes into play. Basically the debt remains no matter what internal government changes take place.
      The precarious position that VZ is in already excludes it from the international credit markets.
      I can’t see the IMF bailing out VZ as long as Maduro is in power.
      If the regime makes the latest round of interest payments, they are still just delaying the inevitable. The decreasing production and the Chinese take off the top can’t be overcome in the present environment. A little back of the envelope math says that oil would need to be around $150 per barrel for Venezuela to return to the pre-crash income levels.
      The rapidly increasing shale production in the US makes me of the opinion that oil will be closer to $40 than $50 in the next 12 – 18 months. I believe that VZ crude trades at about a $10 discount to WTI.
      There is a finite amount of money. The money spent on interest payments will not be available for much needed imports.
      I agree with you that the April payments are in doubt. I don’t see any country extending additional credit.
      I do not know what effect a default will have on current accounts such as food and medicine imports or imports of light oil to dilute the heavy crude. If it becomes the equivalent of COD or prepaid delivery, the lack of foreign reserves is a fatal mistake.
      There have already been issues with international air carriers reducing service due to the problems collecting from the government. This may end most international flights.
      I have never been in a situation where having less money made it better. This looks like what is going to happen.
      I would be interested in hearing from someone that is expert in these default situations and who could explain what the consequences will be.

    • Bill
      I just listened to the Charlie Rose show. People can access it on line.
      At least people are talking. That is a start.
      They don’t seem to have any new insights.
      I did read an article about the US Attorney in NY building criminal cases and that Venezuelans were talking and looking for immunity. How the change in US Attorneys will effect this is still to be seen.
      I do believe that there is more going on behind the scenes than we think.

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