Tom Paine 1949
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- Mar 15, 2020
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- #41
This post isn't about Venezuela or "socialism." But since others have raised the issue, mostly citing older articles, I would like to say that the collapse of oil production and the social and political crisis in Venezuela has deep roots. The issues of corruption, mismanagement, the use of oil resources and profits for public or private, domestic or International use, these were never simply reducible to the question of nationalization. The original nationalizations that created the PDVSA were done well before Chavez came on the scene. "Nationalization of oil" was technically far more total in ... Saudi Arabia!
The worsening of relations between the new government and Western oil companies occurred after the 2002 coup attempt against Chavez, after the great oil strike by anti-Chavez oil managers and workers leading to mass firings of old managers and "disloyal" professionals and skilled workers. At first Chavez was still able to raise standards of living for the poor through programs using oil funds (due to the high oil price at the time), but as the price fell, with increased corruption by new managers, further nationalizations and legal fights over compensation, and without sufficient reinvestment, the oil industry and national economy with it fell into steep decline by 2013 when Maduro became leader. The Trump Administration sanctions were the coup de grace, but Western oil companies were present in Venezuela (granted sanction exemptions) until early this year. CITGO, the last PDSVA moneymaker -- based right here in the U.S. -- was finally stolen from Venezuela and all its funds and resources put into receivership or handed over to the Guaido fake "government."
Even so, the Maduro regime has miraculously held on, partly because so many oppositionist supporters and so many middle-class people have left. If it survives through this next period, oil will probably mostly end up re-privatized. Already, PDSVA runs less than half of active operations, as private deals with (often annonymous) foreign firms have been signed allowing them autonomy and oil rights and physical oil as payment. The Iranian ships coming in with gasoline and spare parts are being paid for in Gold, since sanctions also victimize foreign firms like banks that enable normal payment operations. Lots of foreign actors, Russian, Iranian, Italian, but also American ones, stand ready to move in if the U.S. ever eases its sanctions:
www.nytimes.com
The worsening of relations between the new government and Western oil companies occurred after the 2002 coup attempt against Chavez, after the great oil strike by anti-Chavez oil managers and workers leading to mass firings of old managers and "disloyal" professionals and skilled workers. At first Chavez was still able to raise standards of living for the poor through programs using oil funds (due to the high oil price at the time), but as the price fell, with increased corruption by new managers, further nationalizations and legal fights over compensation, and without sufficient reinvestment, the oil industry and national economy with it fell into steep decline by 2013 when Maduro became leader. The Trump Administration sanctions were the coup de grace, but Western oil companies were present in Venezuela (granted sanction exemptions) until early this year. CITGO, the last PDSVA moneymaker -- based right here in the U.S. -- was finally stolen from Venezuela and all its funds and resources put into receivership or handed over to the Guaido fake "government."
Even so, the Maduro regime has miraculously held on, partly because so many oppositionist supporters and so many middle-class people have left. If it survives through this next period, oil will probably mostly end up re-privatized. Already, PDSVA runs less than half of active operations, as private deals with (often annonymous) foreign firms have been signed allowing them autonomy and oil rights and physical oil as payment. The Iranian ships coming in with gasoline and spare parts are being paid for in Gold, since sanctions also victimize foreign firms like banks that enable normal payment operations. Lots of foreign actors, Russian, Iranian, Italian, but also American ones, stand ready to move in if the U.S. ever eases its sanctions:
To Survive, Venezuela’s Leader Gives Up Decades of Control Over Oil (Published 2020)
Faced with a severe economic crisis, the country’s leader, Nicolás Maduro, is letting foreign firms take over daily operations of its oil fields. It’s a break with core tenets of his socialist revolution.
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