Tag: Venezuela

Hugo Chávez must be distraught. There’s nothing he loves more than to launch into spirited tirades against the “empire” (a.k.a. the USA), and now he has the perfect excuse: it slapped sanctions on Venezuela’s state oil company PDVSA for selling fuel to Iran.

But with the firebrand currently convalescing from problems with his knee, more than a day has gone by and he has still held his tongue (barring a few comments on Twitter), leaving that pleasure to his flunkies. And indeed, they haven’t held back, using the kind of nationalist rhetoric others would reserve for a full-blown land invasion.

The fact is, the impact of the sanctions will be minimal. They won’t affect Citgo, PDVSA’s US subsidiary, nor will they stop Venezuelan oil exports to the US – as if either party wanted that to happen anyway. All they will do is prevent PDVSA from doing things it has little to no interest in doing anyway: competing for US government contracts, obtaining export licenses or receiving financing from the Export-Import Bank.

View of a state-owned PDVSA gas stationSocialist Venezuela has some way to go before becoming the workers’ paradise it would like to be.

Workers at state oil company PDVSA, one of the flagships of Hugo Chavez’s Bolivarian revolution, are expressing “alarm” over the fact that they may be facing lean times in their twilight years after hundreds of millions of dollars went “missing” from their pension fund, because of fraud and even Ponzi activity.

It’s hard to know how much can be put down simply to gross negligence or incompetence on PDVSA’s part, not to mention a scant regard for its workers; but at worst, the affair exposes corruption deep in the bowels of the revolution’s cash cow and provides yet another example of well-connected individuals wrecklessly milking Venezuela’s oil wealth.

Kiran Stacey

I won’t write much about BP’s deal to sell $1.8bn worth of assets in Venezuela to TNK-BP, as that has been dealt with in some detail by Stefan Wagstyl on our Beyond Brics blog. But it is worth picking up a point that cropped up in both Stefan’s post and today’s Lex note.

Stefan writes:

Even before Macondo, it was clear that [Mikhail] Fridman and friends had come out on top, with BP’s Dudley being replaced by a Russian chief executive. The latest deal sees the Russian shareholders gaining further ground – putting the joint venture’s hard cash into international expansion [something BP had opposed in the dispute of two years ago].

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