Subtitled: How to wreck your country.
The management acumen of Venezuela's President Nicolas Maduro continues to amaze. Reuters:Algeria is in talks to export crude oil to fellow OPEC member Venezuela, Algerian Energy Minister Youcef Yousfi said on Tuesday, confirming a Reuters report.
Last week, a document from Venezuela's state-run energy company PDVSA seen by Reuters showed Venezuela was considering importing crude oil for the first time and could use Algerian light crude as blending stock to boost sales of its own extra-heavy oil.
"Yes, we are in talks," Yousfi told Reuters when asked whether Algeria was planning to export crude oil to Venezuela. He declined to provide details. More details come care of the Miami Herald: It turns out that Venezuela's own production of light crudes has plummeted since the late President Hugo Chavez took office in 1999, and the country desperately needs light crudes to blend with its Orinoco Basin extra heavy crude oils. Without such a blend, the Orinoco Basin's extra heavy crude is too dense to be transported through pipelines to Venezuelan ports and exported abroad.
Venezuela's oil production, which accounts for 95 percent of the country's export earnings, should be used in world classrooms as a textbook case of what happens when a populist government starts distributing a country's wealth in cash subsidies, without investing in maintenance and innovation. Much like happened with Cuba's once flourishing sugar industry, Venezuela's Chávez-inspired populism has destroyed the goose that laid the golden eggs.
In 1999, when Chávez took office, PDVSA had 51,000 employees and produced 63 barrels of crude a day per employee. Fifteen years later, PDVSA had 140,000 employees, and produced 20 barrels of crude a day per employee, according to an Aug. 14 report by the France Press news agency.
Venezuela's net oil exports have plummeted from 3.1 million barrels a day in 1997 to 1.7 million barrels a day in 2013, according to U.S. Energy Information Administration estimates. There was a popular riddle bandied about the Soviet Union back in communist days that went something like this: Question: if the Soviet Union conquered the Sahara, what would happen? Answer: nothing for 50 years, then a shortage of sand.
Well, it certainly didn't take Venezuela 50 years to develop a shortage of oil under the inspired economic leadership of the socialist apparatchiks who have wrecked the economy in the name of helping the poor.
Of course, we're not supposed to talk about which countries these apparatchiks are benefitting, but here's a reminder:e China resells $ 5/bbl oil from Venezuela on the international market. I've mentioned it before. |