While Germany’s Chancellor Merkel makes pointless inflammatory comments about Chavez “not speaking for Latin America”, Portugal is the latest of many friendly countries lining up to exchange goods and services for Venezuela’s oil.
Entertaining the Portuguese premier Jose Socrates this afternoon is Hugo Chavez en cadena nacional, hijacking all TV and radio airwaves to drum a series of oft-heard but crucially important messages into the audience. The scene is the Orinoco Belt, within stone’s throw from a freshly-dug oil well.
Not so long ago, the type of oil found in the Orinoco wasn’t even classified as oil. Students, engineers, and politicians in Venezuela knew it as something materially different, and the multinationals walked away with countless barrels of the stuff for a song.
The slim selection of “connected” Western oil firms once working in this super-giant oil zone meant that the official language was strictly English. Nowadays, everyone from China and India to Russia and Cuba have set up shop.
The diverse set of companies now helping to extract the oil are perfectly happy to pay far higher taxes and royalties, and they accept minority stakes without complaint — apart from companies such as U.S. giant Exxon-Mobil, that is, who recently had PDVSA’s foreign assets frozen (at their own ultimate cost), simply to cause a lonely clamor and perhaps score some political points.
Particularly aggravating to the US is that global dollar holdings are falling, partially due to energy-importing nations beginning to be able to pay in alternative currencies, and partially because Chavez and other nations happily accept payment in cows, milk, technology or whatever else is useful.
The largest aggravation, of course, is that before Chavez came along and rescued the oil industry for the material and productive benefit of ordinary Venezuelans, these world-beating oil reserves were about to be sold off — practically given away — to the multinationals, in what was cutely coined la apertura petrolera by the politicians , or “the oil opening”.
Of course, empty suits like Frau Merkel are not in the position to recognise this information, just as it is habitually glossed over by the opposition in Venezuela, who are presumably underwhelmed by the sight of oil now pushing $130/barrel and powering a socialist revolution with no end in sight. Thankfully, the world is shifting rapidly towards leaders increasingly acting in line with their general populations, with the principal result being that the only relations they seek with other countries are mutually beneficial ones.
I think Chavez went a little overboard by calling Merkel a Nazi, because germans really don’t like the Nazi joke, and technically she isn’t really supported by Nazis. They have their own parties.
But her comment about Chavez was indeed really pointless, especially since Chavez has never said he speaks for Latin America. He doesn’t even pretend to speak for Venezuela- he is keenly aware he has many opponents within and outside Venezuela.
But for Chavez going a little overboard is par for the course. It’s difficult to believe Merkel wouldn’t have figured Chavez would shoot back- or what she has to gain from a verbal war that she started for no reason.
Vincent, the remark of Chavez proves beyond doubt that he thinks he speaks for all Latin Americans. Instead of going aloof, he just could have said, yes that is true, we have democracy here. What did he do instead ? He saw this as an attempt to undermine his authority and acted accordingly.
As for having rescued the oil industry for all Venezuelans: PDVSA is one of the most opaque companies on earth, giving Chavez a parallel budget that is practically uncontrolled. If one takes in to account the various corruption scandals (e.g. with the erection of a sugar processing plant where 200 million US dollars vanished – without any action being taken) and the instances where chavez near politicans (including his own family) got visibly rich, I doubt that he resued the oil industry for all Venezuelans.
Opaque? You mean like PDVSA scores low on financial transparency as judged by Transparency International? Oil wars just exposed TI as a bunch of crooks and frauds.
Tom, the ratio of serious corruption cases to infrastructure/projects completed with inconsequential corruption are about 1:500. I don’t think that’s being generous.
Carlos, Oil wars also thought Eva Golingers first book was a serious piece of research even when it was exposed by Veneconomy how crappy this research really was. It is not eactly a trustworthy source. Second it is interesting that every time you try to defend your position you try to smear the messenger instead of disproving the message. Do you know when this tactics is applied ? When the message can not be disproven.
However, re PDVSA opacity: When did you see the last published PDVSA audit – as in audited by an independent auditor ? I think that was 4 or 5 years ago when PDVSA was required to do so by the SEC. Why do you think Chavez pulled PDVSA out of the stock exchange in a complete idioty move costing Venezuelans probably a 2 to 3 digit million USD sum ? To evade exactly this requirement. PDVSA is even outside the control of the public comptroller.
Yesterday I talked with a friend who is in international oil business. We joked that a public exposal of PDVSA accounting would be sufficient to overthrow Chavez He replied that is not possible, not because it would not work, but for a lack of accounting within PDVSA.
Nice work tom, you accuse me of attacking the messenger, but the very first line of your comment is attacking Oil Wars on an unrelated point.
Nice work indeed.
Why don’t you visit oil wars and ask yourself whether TI is too stupid to check PDVSA’s website, or too crooked? You don’t get employed at multi-million dollar NGOs for being stupid.
Carlos, I will explain to you what I mean with opacity:
PDVSA has a very small subsubsidiary in Vienna that is headed by two top notch PDVSA officials, one being no other than Bernard Mommer himself. In order to open this company, Mommer gave a Viennese address (this address has to be by Austrian law the address where the center of living is located). The other is located in the UK.
By law, at least *one* CEO has to have a center of living that is that close so he can effectively supervise personally the daily activities of the company. I.o.W. he has to be at least 20 hours a week in the bureau. By Austrian authorities this requirement is fulfilled if you name a center of living sufficiently close to your office. Another top notch PDVSA official (who actually lives in Vienna) is named as manager.
This raises several questions.
First, does a Venezuelan minister live in Austria ? If he does not, why did he submit a false statement to the authorities ? If he did submit a false statement, what is so important about this company that they did not name the third PDVSA employee – who lives in Vienna and would thus be a legal CEO ? What is so important about a small company that it is headed by no less than three top notch PDVSA officials ? Most importantly, why does this branch not show up in ANY of the PDVSA documents ?
This is what I mean with opacity and inaccuracy of the audits.
Tom, what do you think is happening behind our backs in Vienna? It should be in Switzerland, right? That’s where you stash illegal money.
How many schools, universities, hospitals, clinics, water facilities, trains, subways, bridges, do you think have been built in Venezuela with oil money? Take a guess….
Carlos, Austria has a banking secret as strong as Switzerland and the tax is lower.
Aside that, no answer to my questions instead trying to lay a smokescreen. Carlos, it does not matter how much schools have been built by Oil money. What matters is how much oil money vanished. In this connection: How does the brother of a Venezuelan government member, former a small official – get enough money to buy a bank license and circumvent the requirements ?
You still haven’t provided me with a list of subsidiaries where the Vienna branch has been suspiciously omitted.
Nor are you providing me with any evidence that any significant quantity of money is missing from the accounts.
Guesswork is a lot of fun, I guess.
Carlos, you yourself have provided the link. The supposedly correct audit cited by Oilwars. Aside this, I have started questioning the extremely unusual construction. Where are your explanations ? Don’t lay a smokescreen again.
Aside that, Carlos, why does a subsidiary whose function is information gathering about the oil market reside in a city without any such market and need an accountant with extensive tax consultancy experience ? The tax situation for such offices is very easy in Austria.
Corruption is real and is a problem in Venezuela. PDVSA is relatively opaque. Most of the money in FONDEN goes to actual projects but some of it disappears. This isn’t necessarily a consequence of Chavismo but a consequence of its inability to completely overcome the corruption that existed in the fourth republic and continues to exist in all of Latin America.
Vincent, when USD 200 Mio vanished in a sugar processing plant project, what did the 100% Chavista Asemblea Nacional do ? They did not investigate. They paid another USD 100 Mio. Name *one* bigger corruption case that has been initiated by the Chavez government. Just one. I don’t know of any. However, douzens of politicians, including Chavez entire family got very, very wealthy.
Carlos, another example of the opacity of PDVSA:
In 2005 Ramirez, the Oil Minister and (against the constitution !) President of PDVSA claimed 6.43 Bio USD deposits into BCV – PDVSA is required by law to deposit their earned foreign currency into BCV, every cent. When calculated from the reported production, 2 billion, or roughly 33% of the produced oil was “missing”. Comes in the BCV president, saying the deposit was only 4.02 billion. based on this, 50% of the earned money is massing. Explanation up to now ? None. That is what I mean with corruption and opacity.
Tom-I’m not familiar with that case but I’d be interested in learning more about it. Like I said, I don’t deny corruption exists and is a problem, but 200million sounds like a lot. I don’t know, pass me a link. Spanish preferably, of course.