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How To Wreck Your Country
Venezuela Set To Import Oil

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 Chávez 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.


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  • jaytrain

    And the yet the Chavista regime is enormously popular with the nation’s poor Granting that Maduro controls the media completely , granting that the opposition is a clown show , granting that the regime’s thugs much resemble the squadristi of fascist Italy , the Chavez / Maduro regime is enormously popular with the poor . It is the middle class that has been eviscerated by the regimes incompetence , the middle class which has not left for greener pastures in Canada and elsewhere . It is true that V is a train wreck of lost potential , but it is a slow motion train wreck that may go on for a generation , cf Cuba .

    • B-Sabre

      They’ll keep supporting it until they run out of chickens for the pot. Then they’ll eat the last Chavista elites who fail to make the last plane out.

    • Porkov

      People who are stupid tend to be chronically poor. Of course you can be poor without being stupid, but that is much more likely to be a temporary condition.
      When a candidate or party bases a campaign on an appeal to the poor, they must be aware that their constituency is largely stupid. How is it, then, that the Democratic party portrays itself as the party for intelligent people? What does that say about their enablers in the Press?

  • B-Sabre

    OK, here’s a question – why has the production of light crude dropped off? If it was general incompetence, I’d expect to see both light and heavy crude production drop off. Was a particular group more incompetent than the other? Did they run out of easy-to-get light crude and haven’t been able to master techniques like tracking or horizontal drilling?

    • sunpapushi

      Caracas Chronicles had a discussion about this topic a few days back and they’re not sure whether it was the inevitable exhaustion of light crude reserves or incompetence of the Chavista regime. What they do agree on is that this bad for the regime.

      Here’s the discussion:

      • B-Sabre

        Thanks for the link, but like so many things there are still no definitive answers.

    • Michael Bergsma

      Venezuela’s resource for heavy crude is immense and the wells produce at low rates for a very long time. Their light crude resource requires continual drilling which they have not done. Also, the best talent in their oil industry has been run off out of the country. I have done business with quite a few geophysicists from there now working in the US. Our gain, Venezuela’s loss.

  • Rob Moore

    What did socialists use before candles?


    • placitas

      Bravo, Rob. Good one.

  • Duperray

    Hey guys, you a unfair: The fact they have massive very heavy crude oil reservoirs has nothing to do with political system, but Geology. US, now so proud (at least journalists) is also unable to extract heavy crude oil by fracking, at least not yet. Fracked oil is light crude that Southern US is not adapted to use as stock, hence the need for Keystone access to Canada heavy (less heavy, “pipable”).
    They have enough self created leftist problems everywhere in their economy, no need to unfairly further submerge them with invented ones. By the way we can read that many US citizens think their country is quickly converted to dominant federal system thanks to Obama: be prepared

    • LuapLeiht1

      And why did refineries in the Southern US adapt to use heavy crude as stock? Because Venezuela had plenty of it and it was cheap…

  • CoolTex

    Follow the money…

  • bflat879

    Anyone who knows the history of this understands the irony of it. I can remember when Chavez was promising to send oil to the poor citizens of Massachusetts, because he had so much of it. Shortly after that, he fired all the foreign oil companies and nationalized the oil industry. The rest is history and this is the end result.

  • Cromulent

    The harder socialism is tried the harder it fails.

  • barbaro70

    I would die laughing at this bit of poetic justice if I didn´t have very good personal Venezuelan friends who are suffering terribly as a result of the Obamaesque stupidity of populists in general and of Chávez and Maduro in particular. When will they learn, the Americans who voted for Obama, whatever their reason, and the socialists/populists around the globe? When, oh when, will they learn.

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