PDVSA Keeps Failing

For Wednesday, June 13, 2018. Translated by Javier Liendo.

51
Photo: PDVSA

PDVSA production keeps plummeting and closed May at 1,392,000 barrels per day, 2.7% less than the previous month, as reported by the Organization of Petroleum Exporting Countries (OPEC), with a gap between the figures presented by the Venezuelan government and OPEC’s secondary sources, because the Oil Ministry says that output increased to 1,533,000 bpd, while the secondary sources put it 141 barrels below that. PDVSA has stopped producing 1,262,000 barrels per day since 2015 until May 2018 and among OPEC’s member countries, it’s the nation with the lowest production despite having the world’s largest reserves: we’re OPEC’s eighth producer. Alejandro Grisanti, head of Ecoanalítica, estimates that the State will cease perceiving $29.8 billion (according to OPEC’s secondary sources) or $33.6 billion (official data) in 2018 if the output, already at its lowest level in three decades, keeps declining. Meanwhile, Grupo Zoom published the exchange rate for purchasing remittances: Bs. 1,303,270 per dollar, about half the black market rate, but much higher than the artificial DICOM rate. Of course, remember it’s unidirectional, you can sell dollars at that rate, but nobody will sell them to you with it. And PSUV’s economists? They’re proposing the urgency of more controls and civilian-military commands to overcome the crisis. Geniuses!

Amazing chavismo

The National Electoral Board proposed the National Electoral Council (CNE) holding municipal council elections in December this year.

CNE authority Tania D’Amelio said on Twitter that they’ll study the proposal’s validity, but last night, during his speech in the National Assembly of the PSUV Youth, Nicolás announced that the CNE will convene those elections and that they will establish an electoral regulation for PSUV establishing that at least 50% of candidates must be under 35 years old; promising to ask the CNE to call on international bodies to participate as observers in December. Another clear example of how branch autonomy works in Venezuela. Education Minister Elías Jaua said that students aren’t dropping out of school in the country, they’re only finding it hard to go to school due to transport issues. Naturally, if he denied the mass student dropout rate, he did the same with teacher resignations which he said are “within the regular resignation average.” Lastly, Diosdado Cabello claimed that his daughter Daniella wasn’t deported by the United States as reported by El Nuevo Herald, an argument which he probably expanded in his VTV show.

And in the National Assembly

The Parliament restated its support for the OAS’ disregard for the May 20 electoral process, ratifying it as a farce and thanking the international community for their backing. Lawmaker Francisco Sucre, who’ll replace Luis Florido as chairman of the Foreign Policy Committee, said: “This resolution simply demands transparent elections. The OAS isn’t alone, the European Union also does it as one of the methods to solve the country’s severe humanitarian crisis.” Lawmaker Biagio Pilieri (16J caucus) backed the OAS’ resolution and regretted stances such as the one held by Ecuador’s government, linking the proposal with the protest action that identifies his caucus, restating that they won’t go to any elections before changing the CNE, “changing the regime and we won’t fall for sham dialogues to give it more breathing room.” Luis Florido and Juan Guaidó made a demonstration on “How not to do damage control,” meaning all of Voluntad Popular’s blunders, as they issued a statement denying and condemning corruption accusations against Florido, ratifying that the decision to replace him is a sanction for Florido’s decision-making style and regretting that the internal mishap has turned into a matter of national relevance.

Against censorship

Over 100 human rights organizations condemned the accusations made by Health Minister Luis López against the Coalition of Organizations for the Right to Health and Life (Codevida) and its director, Francisco Valencia.

NGO Proiuris filed a formal complaint before the Prosecutor’s Office, demanding guarantees for the rights of Francisco Valencia and Codevida, in view of the accusations made by the Health Minister. In the joint statement, the defenders explain how these statements seek to intimidate and reprimand activists, healthcare personnel and journalists who have denounced the destruction of the Venezuelan health system, and how this translates to damages and loss of human life. For instance, there’s the painful case of Karla Romero, a six-year old girl who died in the nephrology service of the J.M. de los Ríos Children’s Hospital, becoming the second child who dies since the protective measures were granted by the IACHR.

Additionally, the Press and Society Institute (IPYS) described the new modus operandi for censoring information: HTTPS blocks against digital media outlets operating in Venezuela, which makes it impossible to access their content through CANTV, the most important internet provider in the country.

Abroad

  • Nicaraguan dictator Daniel Ortega offered to hold early presidential elections, in an attempt to quell the popular rebellion that has already lasted 56 days with a terrible balance of 146 people murdered. Nicaraguans demand Ortega’s resignation, while he’s dialed up repression —last night, the Alianza Cívica called for a national 24-hour strike for Thursday, encouraging even public servants to join. Along with early elections, the Episcopal Conference has demanded a transition law, to restore the rule of law and an electoral reform so that elections aren’t held without democratic conditions, with illegalized parties, disqualified candidates and a National Electoral Council controlled by sandinismo.
  • American President Donald Trump and North Korean dictator Kim Jong-Un signed an agreement focused on restoring diplomatic relations, returning to peace and denuclearization, without concrete results nor dates. The agreement also contains lines about recovering war prisoners and missing citizens and returning them home, but no dates, with the promise of future meetings to detail these commitments. Trump said that he’ll stop joint military exercises with South Korea (because they’re expensive and too provocative) and that he’ll guarantee the security of the old U.S. enemy; meanwhile, Kim Jong-Un promised to dismantle the nuclear testing site in Punggye-ri, one of the totalitarian dictatorship’s playgrounds.

Ruperta the elephant died early this Tuesday at the Caricuao Zoo, after months of suffering a severe malnutrition that was ignored and denied by the government. She spent 42 years making children smile, she didn’t deserve such a sad end.

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51 COMMENTS

  1. “Episcopal Conference has demanded a transition law, to restore the rule of law”

    What the hell does that mean?

  2. “Ruperta the elephant died early this Tuesday at the Caricuao Zoo, after months of suffering a severe malnutrition”

    I thought they were feeding the dying animals to the ones that still have a chance, until they are down to one animal? Seems like an efficient strategy if they cant be sent out of the country to a location that will feed them.

    Banana Republics should not have zoos. They are zoos.

    • Elephants eat grass and any other vegetation available. Are they really trying to tell us that Venezuela, a tropical country, ran out of green vegetation? BS! That is just pure neglect! Ruperta would have been better off if they had just set her free.

      Damn, that makes me angry!

    • Yes, I know elephants don’t eat meat. I was recalling a different comment thread from maybe a few months ago when it was reported that the zoo keepers were reduced to feeding some of the animals to others (I think big cat(s)).

      • Re. Ruperta: Elephants in the wild normally die of hunger as their molars wear out from old age and they cannot chew tree bark and leaves any more and I expect it’s the same with those in captivity. The zoo authorities should have known this and taken steps to euthanize her when they saw she could not keep eating.

      • I figured you knew that!

        My wife is from Caricuao, and I went to that zoo in 1988 when she still lived here.

        It was an awful zoo even back then.

  3. In other news, here comes the brain trust to solve their economic problems:

    “(VIDEO) 25 experts presented their economic proposals”
    https://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=UTF8&prev=_t&rurl=translate.google.com&sl=es&sp=nmt4&tl=en&u=https://www.aporrea.org/economia/n326530.html&xid=17259,15700021,15700124,15700149,15700168,15700173,15700186,15700190,15700201&usg=ALkJrhjLDwi0K_UC5nz56tGBsOm0qCvG3Q

    They had me up to “committed to the performance of the revolution” ….

    • Any brain trust of feftist economists is vacuous without the likes of Emmanual Saez and Tomas Piketty chiming in. Throw in “Uncle Joe” Stiglitz and a seasoning of Paul Krugman and you would end up with a perfect stew of utter economic nincompoopery.

    • I read through that whole mess, in English and in Spanish.

      They are all doubling down on stupid. When a little bit of government involvement in commerce is totally screwed up, these morons insist that MORE government involvement is required. What the F*CK is the color of the sky in their world? Has ANY of what they recommend worked anywhere, EVER?

      I hope that the next generation of THINKING Venezuelans remember these frauds and treat them with the disdain they deserve once Chavismo is relegated to the ashcan of history. I think scraping bubble gum from the bottom of desks in the classroom where they once taught would be a just reward for all of their economic and academic prowess.

  4. That picture of Maduro in the tank would be great for creating memes. Just add a couple of “dialogue” bubbles.

    • I didn’t read the article yet (I will, though), but my guess is they’ll totally cut domestic gasoline supply first. That costs them money because of the subsidy and refining costs, plus they have to import it anyway.

      The country is shortly back to horse and buggy days anyway, but as long as PSUV can export crude and steal the $, they’ll take that option.

      Now, as far as having any CAPACITY to pump at all, that’s sure a possibility. So let me read that article now.

      • Just read it, and it’s kind of shallow. It doesn’t go into any of the main aspects of this at all, such as oil for loans that have delivered, and the seizure issues.

        It didn’t even delve into pumping capabilities very deeply…the why.

        • @Ira…you are right, it does not dig deeply into the many underlying causes. It was their conclusion that I found very interesting. I had not yet heard anyone say that the ability to export could cease by the end of the year.

        • I read the article too. I thi k all they are doing is looking at the production graph and extrapolating.

          I think I recall that Venezuela’s domestic consumption was 600 thousand bpd. But, that figure was from several years ago. I would expect that that figure has declined significantly due to:

          1. Drastic reduction in economic activity.

          2. Far fewer cars, busses, and trucks circulating. They break down and are not repaired due to lack of parts. And they are not replaced with new vehicles.

          3. Population reductions due to migration.

          I have no hard data (who does?), but if 600 thousand bpd was the peak domestic consumption, I am thinking it is now half of that, or 300 thousand bpd.

          • Roy – How much of that demand reduction has been off set by an increase in the activity of gasoline smuggling to Colombia? I am guessing there are a LOT of military types that are being paid off by Maduro et al by way of having plenty of free gas to “export”. This is a big source of income in a country with no source of income.

            I would think Maduro would cut-off normal consumers way before he cuts off the smugglers.

          • I would think Maduro would cut-off normal consumers way before he cuts off the smugglers.
            Sounds plausible to me. Lot of higher-ups making a lot in bribe income.

          • I really couldn’t guess at actual numbers of how much gets smuggled out of the country. However, I doubt that the amount of smuggled fuel has changed all that much. And, while the amount is large and unacceptable, it is still not a large fraction of the total consumption.

          • Good point about the reduction in domestic consumption.

            But even if it’s now half, a huge number, they’re STILL experiencing shortages and lines at the pump.

            I don’t know how bad the street corner level of supply is…we only hear about it very sporadically for the extreme cases, so…

            CC, how about a story about this? What the hell is happening with domestic gasoline supply and demand on a national level/breakdown?

            I might just invest in a Donkey breeding farm in Macuto.

          • “CC, how about a story about this? What the hell is happening with domestic gasoline supply and demand on a national level/breakdown?”

            Ira, I would be interested too. But, where would you get the data to make it anything more than pure speculation?

          • Roy, I would settle for random anectodal reports, like MRubio saying this is what’s happening here, somebody in Maracaibo saying this is happening there…

            Basically just eyewitness accounts of what’s going on at the gas stations as to availability and lines.

            Doesn’t have to be a statistical thing, but I’d like to hear it updated more often. The last I heard about this on CC was a month ago, maybe longer.

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    By Marianna Parraga

    (Reuters) – Venezuelan PDVSA’s U.S. refining unit Citgo Petroleum is increasing its efforts to buy crude oil on the open market to compensate for declining supplies from its parent, which is dealing with a severe tanker backlog, traders said on Monday.

    Citgo has a 273,000-barrels per day (bpd) contract to import Venezuelan Merey crude from PDVSA, but the parent company has not sent a single cargo of that grade in over a month, forcing its subsidiary to buy spot cargoes of diluted crude oil (DCO) from PDVSA’s joint ventures, according to traders and Reuters data.

    “They are mainly looking for Latin American heavy grades,” said a trader who sold two spot crude cargoes to Citgo for June delivery.

    In recent weeks, Citgo also has been buying Colombian and Ecuadorian heavy grades on the spot market, as well as Azeri Light from the Black Sea and Arab heavy and medium crudes, according to the data and traders.

    Declining oil production, lawsuits by creditors, lack of spare parts for terminals and an executive braindrain have reduced PDVSA’s ability to export oil, which is the OPEC-member country’s main source of revenue.

    http://www.euronews.com/2018/06/11/citgo-seeks-crude-as-supplies-from-venezuela-dry-up-trade-data

  6. So what happens when the gang of thieves have basically zero income from oil exports? Do the rats thdn abandon the sinking ship?

    • I will not predict that but they most be close. If the Chinese extended loan terms (interest only repayment) about 400,000, domestic consumption about the same; that would leave about a third of production generating profits. Say they get $60 a barrel that would only leave $20 a barrel after lift costs. But wait they still have Cuba and a few other PetroCaribe countries to “SERVICE”, where recently they went onto the open market to fulfill “contracts”. I would guess in a month or two they will start to dip into whatever foreign reserves they have left. Reportedly $8billion. That can not go far in a country that imports nearly everything.

    • The real prize in Vz is the land (and what lies beneath). As oil revenue and eventually drug revenue dries up, the elimination of El Pueblo will accelerate — by starvation, migration, etc. Then the Cubans will complete the take-over, with or without a short enchufado war.

  7. We’re all going to the zoo tomorrow. Zoo tomorrow. We can stay all day.
    We’re going to the zoo zoo zoo we can stay all day.
    Venezuela will not leave us, It is a country, with a zoo for leadership
    Don’t kill the elephants – kill the keepers.

    • At the Zoo.
      Someone told me
      It’s all happening at the zoo
      I do believe it
      I do believe it’s true

      It’s a light and tumble journey
      From the East Side to the park
      Just a fine and fancy ramble to the zoo
      Bus you can take the crosstown bus
      If it’s raining or it’s cold
      And the animals will love it
      If you do, now

      Somethin’ tells me
      It’s all happening at the zoo
      I do believe it
      I do believe it’s true

      The monkeys stand for honesty
      Giraffes are insincere
      And the elephants are kindly, but they’re dumb
      Orangutans are skeptical
      Of changes in their cages
      And the zookeeper is very fond of rum

      Zebras are reactionaries,
      Antelopes are missionaries
      Pigeons plot in secrecy
      And hamsters turn on frequently
      What a gas!
      You gotta come and see
      At the zoo
      At the zoo

  8. We’re all going to the zoo tomorrow. Zoo tomorrow. We can stay all day.
    We’re going to the zoo zoo zoo we can stay all day.
    Venezuela will not leave us, It is a country, with a zoo for leadership
    Don’t kill the elephants – kill the keepers.
    11111111111111111

    • One day a Cop pulls a van over and when he walks up to the window he sees ten penguins in the back.

      The cop asks the man “are those your penguins?”

      The man Says “yes, they are my pets.”

      The cop replies to the man “You need to take them to the zoo right now.”

      So the man agrees and drives off. The next day the cop pulls over the same van and he walks up to the window and sees the ten pengins all wearing sunglasses.

      The cop says to the man “I thought i told you to take those penguins to the zoo.”

      The man says “I did, today we are going to the beach!”

  9. Way off topic, but VZ voted FOR the “United Bid” (US, Can, Mex) for the world cup 2026.

    Interesting, those voting against included France, Italy, Netherlands, and abstaining Spain and Luxembourg

  10. Venezuela eyes first-ever refining of foreign oil

    Venezuela is considering producing fuels from foreign crude oil for the first time, according to planning documents seen by Reuters, as the country struggles to meet its obligations despite having the world’s largest crude reserves.

    State-run oil company PDVSA may process up to 57,000 barrels per day (bpd) of foreign crude in June at the country’s largest refinery, according to a monthly refining plan which was viewed by Reuters on Wednesday. The output would help fulfill fuel contracts for Russian, Chinese and other customers and reduce purchases of fuels for domestic use, the documents showed.

    https://www.reuters.com/article/us-venezuela-pdvsa-refineries/exclusive-venezuela-eyes-first-ever-use-of-foreign-oil-for-contracts-documents-idUSKBN1J92SQ

        • See my reply to your link about the toilet paper confiscation story on Apporea in the comments to Naky’s contribution yesterday.

        • The whole notion of Venezuela being reduced to purchasing crude from the market and importing it for refining into fuel products is shocking to me. It’s like hearing that Saudi Arabia has been forced to import sand. Boggles the mind!

    • MR
      Vicky said that she has been unable to contact Crystal’s mother by phone. Eventually you folks will have to learn how to use smoke signals. A good start would be burning Miraflores.
      Maria has assured Vicky that the vitamin D supplement will be in her hands by Friday.
      I may have found a source for the generic Zemplar. Fingers crossed. I should know by Monday.
      I only have a cell phone. Tomorrow afternoon I am going to try an operator assisted call from a landline.
      Keep your phone nearby.

    • I am surprised, but not at the reduction in crude production. I would have thought that the refinery capacity would fall faster than crude supply.

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