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December 26, 2018

Venezuela Oil Production At Virtual Halt as Socialist Plan to Seize The Industry Results In Collapse

Unexpectedly!

Maduro nationalized the oil industry, kicking out foreign operations who knew what they were doing and replacing them with Socialist goons who didn't. He put a lot of soldiers into position to oversee the operations, because he deemed them loyal.

But soldiers don't know anything about oil drilling either.

In a little-noted reversal of the Socialist government’s two-decade drive to nationalize the industry, the lack of expertise among military managers is leading PDVSA [the socialist bureaucracy now destroying the petroleum industry] to hire outsiders to keep afloat even basic operations, like drilling and pumping oil. To the dismay of many familiar with Venezuela's oil industry, some of the contracts are going to small, little-known firms with no experience in the sector.

Combined, industry veterans say, the steps leave Venezuela's most important company -- which accounts for over 90 percent of export revenue -- with even fewer means to rebuild the nation’s coffers, pay its many creditors and regain self-sufficiency as an oil producer.

"What we are witnessing is a policy of destroying the oil industry," said Jose Bodas, general secretary of the Oil Workers Federation, a national labor union. "The military officials don't listen to workers. They want to give orders, but they don't understand this complicated work."

Maduro defends the military managers, arguing they are more in synch with his Socialist worldview than capitalist industry professionals who exploit the country for personal profit. "I want a Socialist PDVSA," the president told allied legislators earlier this year. "An ethical, sovereign and productive PDVSA. We must break this model of the rentier oil company."

...

Now, critics say, military officials atop PDVSA have put aside any pretense of running it like a proper business, doing little to stem the fall in production or improve the company's financial, operational and staffing problems.

No matter the dysfunction, PDVSA remains a rare and crucial source of foreign currency in the enfeebled Andean country. For Maduro, who became president after Chavez died in 2013, handing the company over to the military is seen by many as a calculated move to buy loyalty from officers.

"No one will be able to remove the military from PDVSA now," said Rafael Ramirez, a former oil minister. Ramirez ran the company for a decade under Chavez before clashing with Maduro, who accuses him and many other former executives of corruption. "PDVSA is a barrack."

This story won't be complete until Alexandra Ocasia-Cortez vomits ignorance all over herself.

Should be about ten minutes now.

Meanwhile, Russia has taken over five Venezuelan oil fields for the fire-sale price of $1.5 billion in bailout money.

In exchange for modest loans and bailouts over the past decade, Russia now owns significant parts of at least five oil fields in Venezuela, which holds the world's largest reserves, along with 30 years' worth of future output from two Caribbean natural-gas fields.


Venezuela also has signed over 49.9 percent of Citgo, its wholly owned company in the United States -- including three Gulf Coast refineries and a countrywide web of pipelines -- as collateral to Russia's state-owned Rosneft oil behemoth for a reported $1.5 billion in desperately needed cash.

Venezeula nationalized-socialized the oil industry to kick out foreign owners, and wound up selling a huge chuck of their oil fields to a foreign owner for a song.


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posted by Ace of Spades at 04:33 PM

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