Wasn’t it the case that the compensation Venezuela was ordered to pay Exxon by a World Bank arbitration tribunal was a “favourable end” to a longstanding legal battle because it was considerably lower than the figure the company had sought?
It seems not, even if those were the words Venezuela’s foreign minister, Rafael Ramírez, penned in a statement this month. Fast forward two weeks and the International Centre for Settlement of Investment Disputes, or ICSID, said it had received a request from the Venezuelan government for a revision of the award.
Venezuelans do not really dance the tango. But in the mooted sale of Citgo, the country’s US refining operation, that is what the socialist government has been doing – taking one step forward, two steps back.
In an interview published on Sunday by leading daily El Universal, Rodolfo Marco Torres, Venezuela’s finance minister, said the socialist government had scrapped any plans for a sale. “The sale of Citgo is discarded,” he told the paper. “Venezuela continues with Citgo and will continue making the investments in the refineries.”
Blame the Empire.
Venezuela’s socialist President Nicolás Maduro on Wednesday accused the United States of oversupplying the market -in his words, “inundating the market”- to rattle oil prices. His government is maybe having a tough time coping with a sliding crude price as oil accounts for some 95 per cent of export revenues of the energy rich country.
The toxic combination of dropping oil prices, an economy in shambles and lower levels of foreign reserves, has been reinvigorating fears of a debt default. Alejandro Grisanti, head of Latin America economics research at Barclays, said on Wednesday in report titled “Venezuela: The perfect storm”:
A long-proposed sale of Citgo, the US subsidiary of Venezuela’s state oil company PDVSA, is once again making some waves. Rafael Ramírez, the powerful boss of PDVSA who is also oil minister and deputy president for the economy, said this month that a sale could go ahead “as soon as we receive a proposal that serves our interests.”
But in the US on Wednesday, Joe García, an energy savvy Democratic Congressman from Miami, urged the Obama administration to block the sale.
The revolving door at Venezuela’s oil sector continued to spin on Wednesday after Lukoil, Russia’s second largest oil producer, said it was withdrawing from a multi-billion dollar oil project in the country’s heavy oil rich Orinoco basin.
The news comes just a month after Malaysia’s Petronas pulled out of another big project.
Venezuelans are waiting anxiously for some kind of economic adjustment, which some have interpreted to mean there may be a devaluation in the works after it was announced last week that the measures would “develop the export capacity of the economy”.