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Venezuela Oil Production Continues Slow Recovery

According to state oil company PDVSA, production is again approaching one million barrels per day.

By Ricardo Vaz | Venezuelanalysis | December 11, 2019

Caracas – Venezuela’s oil output increased slightly in November for the second month running.

The monthly report of the Organization of the Petroleum Exporting Countries (OPEC) registered Venezuela’s November crude production at 697,000 barrels per day (bpd), as reported by secondary sources, up from 685,000 bpd in October.

State oil company PDVSA’s direct reporting to OPEC showed a bigger increase, from 761,000 to 912,000 bpd. Exports reportedly averaged over one million bpd as the oil giant drained stored crude.

Venezuela’s flagship industry has seen output fall precipitously from 1.911 million and 1.354 million bpd in 2017 and 2018, respectively, following the imposition of crippling US financial sanctions. PDVSA operations have likewise suffered from mismanagement, corruption, brain drain and lack of maintenance.

Before the trend was reversed in October and November, production had steadily plummeted following a US oil embargo imposed in January, which was expanded to a blanket ban on all business with Venezuelan state companies in August.

The August measures additionally authorized secondary sanctions against third party actors, leading several foreign companies to cancel oil shipments, including China’s state oil company CNPC. PDVSA has reportedly resorted to selling a large proportion of its crude output to Russian energy giant Rosneft, which then reroutes it to other destinations.

PDVSA’s modestly rising production levels comes as the firm resumes shipments to Indian customers such as Reliance Industries following a four month hiatus due to US threats. Dealings often involve exchanging crude for fuels or diluents so as to avoid sanctions. According to unnamed Trump officials cited by Bloomberg, the White House has ruled out sanctioning Indian firms at this time.

Analysts agree that recovering oil production is key to Venezuela’s economic recovery, but US Treasury sanctions create significant hurdles for foreign investment.

Reuters has recently reported that government and opposition figures are contemplating allowing private companies in joint ventures with PDVSA to operate oil fields themselves. The move would represent a reversal of a longstanding policy dating back to former President Hugo Chávez’s government which required that PDVSA retain operational control of oil operations. In an attempt to attract foreign investment, the Maduro government has also loosened the requirement that PDVSA hold at least a 60 percent stake in joint ventures, requiring only a majority stake in new dealings.

As part of ongoing talks, government representatives and several minority opposition parties have recently agreed to seek oil-for-food and oil-for-medicine agreements with international partners, but no further details are known at this time.

Edited by Lucas Koerner from Caracas.

December 11, 2019 Posted by | Economics | , , , | 1 Comment

Lavrov: US Sanction Against Russian Company Violates Int’l Law

teleSUR | March 12, 2019

U.S. Secretary of State Mike Pompeo is criminalizing Russian companies for doing business with the Venezuelan state, saying they are violating U.S. imposed sanctions by making transactions with Venezuela’s sanctioned oil company Petroleos de Venezuela (PDVSA).

In a Monday press conference Pompeo said that the assets of Evrofinance Mosnarbank, a Russia-Venezuela states-owned financial organization would be frozen and U.S. citizens would be prohibited from doing business with the joint venture, according to Reuters.

The U.S. State Department said in a statement that Evrofinance was violating a Trump decree because it is a “foreign financial institution that materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of (PDVSA).”

Pompeo also accused the major Russian oil company, Rosneft, of defying U.S. sanctions by buying oil from PDVSA.

According to Sputnik News, Russian Foreign Minister Sergey Lavrov said Pompeo’s “accusations … contradict international law.” ​​​​​​​

Lavrov said Pompeo’s “accusations that Russian oil company Rosneft bought Venezuelan oil in violation of Washington sanctions contradicts international law.” ​​​​​​​

Talking to reporters the secretary of state included not only accused Russia but Cuba of trying to undermine democracy in Venezuela.

“This story is not complete without acknowledging the central role Cuba and Russia have played and continue to play in undermining the democratic dreams of the Venezuelan people and their welfare,” Pompeo said.

“Moscow, like Havana, continues to provide political cover to the Maduro regime,” added the U.S. official.

Meanwhile, Trump’s right hand in Venezuela, Elliot Abrams, says he is persuading and urging India to stop buying oil from Venezuela, from who it purchases approximately 366,000 oil barrels per day.

The current U.S. government began a soft coup against Maduro shortly after entering office by placing a slew of sanctions against the Venezuelan government and individuals.

As the list grew and intensified, the U.S. administration sent in Guaido in late January to take over the democratically elected Venezuelan government under Maduro. Most recently, last weekend the White House supported, if not masterminded, the cyber attack on the South American country that caused a nationwide blackout in an effort to create chaos and influence the overthrow of Maduro.

According to the Venezuelan government as of February of this year the country has lost US$38 billion in direct losses from U.S. financial sanctions alone.

For his part, U.S. national security adviser John Bolton announced over Twitter that Venezuela’s National Assembly, still in operation despite being in contempt of the country’s Supreme Court, “decreed the suspension of oil exports to Cuba.” Bolton added, “insurance companies and flag bearers who facilitate these deliveries to Cuba are now on notice,” signaling potential sanctions for those doing business with either country.

The Cuban government quickly responded to Bolton’s proclamation saying he has “long-time credentials … (as) a liar.”

Cuba’s foreign ministry office said in a statement: “The honest and informed people know the bilateral relationship between Cuba and Venezuela is based on mutual respect, true solidarity, fidelism and chavism—independent and sovereign.”​​​​​​​

March 12, 2019 Posted by | Economics | , , , , , | 1 Comment

Venezuela’s Bolivarian University Opens New Campus

By Ryan Mallett-Outtrim | Venezuelanalysis | April 2, 2014

Mérida – A new campus of the Bolivarian University of Venezuela (UBV) has been inaugurated in Venezuela’s Falcon state. The UBV offers free degree courses at undergraduate and postgraduate levels.

Established in November 2003 under Mission Sucre, the UBV is aimed at providing higher education opportunities to Venezuela’s poor.

The UBV’s newest campus in Falcon’s Los Taques municipality has 30 classrooms, and will benefit over 5600 students, according to the government. The campus also has recreational, dining and administrative facilities, and was its construction was funded by state oil company PDVSA.

President Nicolas Maduro inaugurated the campus on Tuesday via radio.

Officially, the UBV has more than 1300 campuses in 335 municipalities across Venezuela. However, apart from the main campus in Caracas, most UBV facilities are significantly smaller than the new Falcon site. The mission initially operated out of buildings owned by PDVSA, but is now hosted by schools and other educational institutions outside normal operating hours.

More than 695,000 people have studied or are studying through the UBV, while 379,000 have graduated.  Over 5000 UBV students are indigenous Venezuelans. The university has also handed out over 150,000 scholarships.

Like most universities in Venezuela, the UBV provides tuition free of charge to the student, including meals.

The university also primarily offers courses in areas considered by the government to be of national priority, ranging from education, law, healthcare, engineering and others. Courses generally involve high levels of community service, and usually have lower entrance requirements than Venezuela’s traditional universities.

The campus at Falcon will mostly be geared towards courses in agro-ecology, architecture, social communication, environmental management, public health, social development, computing, and petrochemical refining.

April 3, 2014 Posted by | Economics | , , , , , | Leave a comment

Venezuelan State Enterprises Sign Agreement to Develop Orinoco Region

By Tamara Pearson | Venezuelanalysis | August 21st 2012

Mérida  –  Yesterday President Hugo Chavez met with over a thousand workers in the large hall of the Caruachi Hydroelectric Complex of the Guyana Venezuela Corporation (CVG) to sign an agreement to begin the organisation and construction of the Orinoco Axis of Development.

Representatives of Venezuela’s state-owned oil company PDVSA and CVG signed the agreement to collaborate in the creation of this “axis of development” in the Orinoco area, one of several such axes in specific regions that Chavez has proposed in his plan for 2013-2019. CVG is a mostly worker co-managed entity that extracts and processes primary material such as iron, gold, and bauxite.

Chavez said the strategy was to unite the north and south of the Orinoco zone. That is, to unite the Orinoco Oil Belt to the north of the river, which holds the world’s largest oil reserves, with the Industrial Mining Belt to the south of it. However, Chavez said the area also includes 600,000 hectares where agricultural production can be fostered. The axis will have an area of around 100,000 square kilometres in total.

The union between PDVSA and CVG is the result of years of discussion, Chavez said, “and is related to large historical objectives which we have proposed for ourselves… and the need for planning… in the long and medium term”.

CVG president Rafael Gil Barrios explained to the press today that the PDVSA-CVG agreement is already being concretised, including the creation of mixed companies (smaller companies run by the two larger main ones) such as Petro San Feliz. CVG will own 10% of this company, of the 70% of stocks that PDVSA already owns.

Steel projects, Workers and Mercosur

Workers from CVG, from the Sidor steel plant, and from PDVSA attended the meeting with Chavez, during which he also approved US$ 324 million for Sidor, to go towards increasing its production. That includes $18.5 million to update rust removal technology and $250 million for a project to install machinery for round billet mould assembly. The steel tubes produced from this machinery will benefit the petroleum industry in the Orinoco oil belt. The financing comes from agreements with China.

Chavez asked workers to audit the projects and to protest when work is taking too long or is halted. His comment comes as some cement workers have voted to go on national strike “against the policy of the Chavez government of freezing collective contracts in order to please the capitalists”, as stated by the Revolutionary Socialist Current two days ago.

“Just like when you all protest, and rightly so, when for example, the dividends don’t arrive… so I approved Bs 600 million recently for such loans,” Chavez said, adding that, “Workers have the right to protest in a thousand ways, but not damaging the production of … the [state owned] companies of Guayana… there are mafias who buy off the workers…and their managers… they have to be denounced.”

The president also emphasised the importance of the axis and its region in Venezuela’s incorporation into the trade bloc, Mercosur, formalised in July.

“We have to start to construct the railroad from the Caribbean (Puerto La Cruz, Venezuela) to Manaos (in the Brazilian Amazon)… this is vital and Guayana’s role in that is vital,” Chavez said and also announced that he was forming a new presidential commission to deal with Venezuela’s integration into Mercosur. The commission will consist of mostly selected members of his cabinet and is presided by Foreign Minister Nicolas Maduro and Mercosur executive secretary Isabel Delgado.

Nicolas Maduro, added, “This large economic force, this mining, industrial, petroleum, agricultural force is our country’s direct relationship with Mercosur… the Mercosur commission starts today (Monday) and they have oriented us towards forming a Business Council and a Worker Council of Mercosur”.

“There’s a lot of motivation to increase the productive and exporting potential Venezuela has in the large market of South America, which is Mercosur,” Maduro concluded.

The government re-nationalised the Sidor steel plant in 2008, and CVG workers in July 2009 proposed a model of production and workers control which Chavez supported, called Plan Socialist Guayana 2009-2019.  The plan involved transforming the state owned CVG and its companies into socialist companies, and in 2010 CVG workers elected the directors of the respective companies that make up the corporation for the first time.

Ramirez confirmed as president of PDVSA and increased oil production

Today Chavez also announced that the president of PDVSA, as well as the minister of petroleum and mining, Rafael Ramirez, will remain president of PDVSA for the upcoming management period of 2013-2019.

Chavez made the announcement during a meeting in Monagas state with the workers of the Orinoco Oil Belt there. He also outlined plans to increase petroleum production in Venezuela generally to 6 million barrels a day by 2019, said that the government is currently “investing around 5 billion dollars in the belt” and that over the next 6 years the government aims to invest $100 billion.

Ramirez informed that the Venezuelan state has received US$ 383,223 million through petroleum taxes over the last thirteen years. This income was a result of fiscal reforms the government implemented from 2002 in the petroleum sectors. Before those reforms, transnationals in the petroleum sector only payed taxes of 1%, a figure the government increased to 33% in 2002.

Chavez said this money has been invested in education, health, agriculture, and housing.

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August 22, 2012 Posted by | Economics, Timeless or most popular | , , , , , , | Comments Off on Venezuelan State Enterprises Sign Agreement to Develop Orinoco Region