Posted on 05/07/2003 12:27:05 AM PDT by Cincinatus' Wife
An unrecognizable "delegation" from PDVSA, Venezuela's national oil company, is visiting Houston and the Offshore Technology Conference this week. Scheduled speakers from the "old" PDVSA (of four months ago) have been unceremoniously relabeled in the OTC program. The Venezuelans from the "new" PDVSA will probably try to put a brave face forward, but the effort promises to be at best whimsical if not disingenuous.
Although some of the new top management comes from retirees and ex-employees, many have no credentials other than their revolutionary fervor; quite a few have not been involved with the business before at all; and, in a highly unusual turn for the international oil business, they do not speak or understand English. It was a struggle for some to get their first-time U.S. business visas for the OTC show.
To be certain, even in the new PDVSA there is a definite discontent among the chavistas. The power re-allocation has created a lot of discontent, and it has been very difficult to assign managers by their technical ability over political and ideological purity. Even among the scant remaining "loyal" technical force, it has been hard to swallow the new political chiefs.
President Hugo Chavez' PDVSA blatantly intends to use its OTC mission to attract fresh international capital and bring new faces in contact with the new PDVSA faces. In the process, they will attempt to make the petroleum world believe that the fired employees were "bad guys" who were damaging Venezuela's profoundly oil-based economy and efficiency.
This is a tall order.
In the last four months, the Chavez government, following a yearlong conflict with PDVSA and much of Venezuela's middle class (the oligarchs, in Chavez-speak), fired more than 20,000 employees out of a total work force of 39,000. The story is actually far more serious because those fired were more than 90 percent of the engineering and managerial staff. PDVSA -- perhaps one of the developing world's most successful and egalitarian professional enterprises -- has been decimated.
As dramatic and infuriating as the Chavez shenanigans may be for the Venezuelans involved, they also bode quite a bit of trouble for the United States.
While bumped from the daily news for the last few months by events in Iraq, Chavez is a Castro wannabe and one who has blatantly embraced ideologically and physically all nose-thumbers of the United States, from Saddam Hussein himself to Libya's Moammar Gadhafi and Iran's Mohammad Khatami. He sent a "dear, compatriot" letter to none other than Ilich Ramirez Sanchez, the infamous Carlos the Jackal, now in a French prison. One of Carlos' brothers is a high-ranking official in the Chavez ministry of energy.
We could brush off Venezuela's travails as yet another internal strife in a much tormented oil producing country with an endemic history of corruption and ineptitude. But this is too close to home, with Venezuela's oil playing a huge role on the U.S. energy security and a direct linkage with our gasoline prices. Venezuela is the largest exporter of refined products to the United States and holds a significant position in U.S. domestic refining capacity. PDVSA also owns Citgo, one of the largest retailers of gasoline in this country.
What has been going on in Venezuelan oil production the last few months?
After a devastating and permanent removal from the market of at least 250 million barrels during the strike, the country's oil production is now about 2.6 million barrels a day, compared with 3.4 million before the PDVSA strike. This partial rebound is misleading because 1 million barrels a day comes from foreign company "associations" in Venezuela and 800,000 barrels a day come from the giant North Monagas and El Furrial fields. These fields are now being produced at full throttle with many technical questions as to the long-term damage that this overproduction may cause. Decapitation of the engineering staff has led to a big drop in production from the more challenging fields. Such a decline will accelerate further and will become devastating next year and thereafter. It is not just the dearth of know-how; there will be no money to reinvest.
PDVSA today has the largest debt in its history. Service companies, oil carriers and suppliers are now owed probably $3 billion to $5 billion, accumulated over the last five months. Coupled with the fact that the Exim Bank has eliminated all credit guarantees for Venezuela and Chavez's own debt to his constituents, whose bribing will have to be manifested in increased welfare spending and giveaways, point toward a very turbulent time ahead.
It will be interesting and somewhat breathtaking to watch the "show" by the new PDVSA delegation this week in Houston.
Economides is a professor at the University of Houston. Oligney is director of the Texas Energy Center. They are co-authors of The Color Of Oil.
After PDVSA workers walked off the job last December in a bid to force Venezuelan President Hugo Chávez from office, the fiery populist hitched his social revolution to the $110 billion business: He purged the company's ranks and installed his own people. What was widely regarded as a world-class energy company before the strike has a new philosophy: to help the poor. And a new corporate culture is gradually taking shape, injected with the president's particular brand of leftist ideology.***
May 2, 2003 - Venezuela Government Says Minimum Wage To Rise 30% By October [Full Text] CARACAS -(Dow Jones)- Venezuela's minimum wage will rise to 247,104 bolivars ( $1=VEB1598) per month as of October, 30% higher than the current VEB190,080 per month, the government's Venpres news agency reported late Thursday
The rate will initially rise 10% to VEB209,088 per month in July, Venpres said in a report correcting President Hugo Chavez's initial announcement Wednesday that the final rate will be VEB237,000 a month. The increase will affect 582,000 workers in the public sector and 2.37 million in the private sector, according to Venpres. Venezuela's total workforce is about 11 million of its 24 million people.
Local media reported the public-sector portion of the increase will cost the government about VEB800 billion. The pay hikes will probably fall short of consumer price increases this year, seen hitting 50% as the country's economic crisis deepens. Analysts estimate the economy will shrink at least 10% this year following last year's 8.9% contraction amid 17% unemployment. Last year, the government increased the minimum wage by 20%, but inflation ended the year at 31.2%, severely affecting purchasing power. [End} -By Jehan Senaratna, Dow Jones Newswires; 58212 564 1339; jehan.senaratna@dowjones.com
Does Chavez not understand that the US has 12 aircraft carriers? Also, Venezuela is within the range of B-52's, B-1's and B-2's at their home bases in the the US.
Don't you mean misguidence?
Only 2 solutions to the Cuban problem ***There are only two solutions to the Cuban problem. One is the application of a real embargo, prohibiting any money to be sent there from this or any country. Same with travel. An embargo by the whole world. The kind of embargo placed on South Africa during apartheid. Yes, it is hard, but it would work. I have relatives in Cuba, and I have never sent a penny there.
The other solution is an American intervention and temporary occupation, for perhaps six years. In the '90s, there was an embargo against Haiti. When that failed, the Clinton administration sent an aircraft carrier. We restored a "leader" (or another dictator, depending on whom you ask). There was a catch, though -- the Congressional Black Caucus was in favor of that great military action.
People who know me well know that, for 40 years, I've been present for the Cuban cause and will always be. To reach these conclusions has not been easy, but I challenge anybody to give me another solution, logical and feasible. I'm all ears. Just make sure you speak loud enough for the Cuban opposition to hear you -- behind all that concrete.***
There are enough reliable Cubans (also well educated and successful) in this country that I doubt US forces would actually be needed to occupy Cuba once our military finished taking it over.
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