PDVSA cuts 2015 production goals

What do you say I just schedule this headline to automatically reappear once a year?

Venezuelan state oil company PDVSA now projects 4 million barrels a day of output in 2015, down from last year’s plan for 4.46 million. Plans are to grow to 6 million bbl/day in 2019. It’s all pretty tricky, as PDVSA will need to come up with billions of dollars in oilfield investment, rather than spending every spare dime on housing and Ponzi schemes. We’ll see.

I’d add more detail from today’s newly released financial reports, but PDVSA doesn’t see fit to share with the public on the web, instead handing out the financial report on paper to invited guests. I keep deleting the obscenities I am writing here, because this is a family blog.

Venezuela gets another arbitration complaint

Reuters already has the news:

CARACAS, July 19 (Reuters) – The World Bank will hear an arbitration case requested by U.S. company Koch Industries after Venezuela’s President Hugo Chavez nationalized a fertilizer plant it owned with the OPEC nation’s state oil firm.

On Tuesday, The World Bank’s investment dispute body ICSID said on its website it will form a tribunal to hear the complaint by two subsidiaries of Koch, one of the world’s largest privately owned companies.

That makes 18 pending cases against the Bolivarian Republic, for those keeping count at home.

My prior article about how Venezuela subsidized these famous Tea Party stalwarts.

Happy Birthday, copper de pueblo

From book "Chile Minero" published by OchoLibros

Today is the 40th anniversary of Chile’s nationalization of the copper industry. On the one hand, this overtly socialist act — giving the masses ownership of the means of production — may have been a death warrant for President Salvador Allende. On the other hand, it was so popular in Chile that Allende’s successor, General Augusto Pinochet, never dared re-privatize the industry. At least not officially.

So why are there are so many private copper mines in Chile today? The national company, Codelco, continued to exist, but never grew. It stuck with its fantastic but aging properties. The company could never hang onto enough money to reinvest and enhance production, as cash was diverted to other government needs. Pinochet began the process of inviting in private companies, both local and foreign, to invest in new mines. The process continues to this day.

Still, nationalized copper remains a winning issue in Chile. For all of the country’s reputation as the right-wing bastion in South America, everyday people have an ingrained socialism. Remember, current president Sebastian Piñera is the first person to the right side of the spectrum to have won an election in this country since before Allende. It was 1958 or 1964 (depending on how you count left and right) the prior time a rightist party took the presidency in an election.

Today, it’s a hot button once again. Student marchers are demanding nationalization, and/or higher taxes on private companies, to increase the education budget and bring back to Chile something that already exists in Mexico, Venezuela and many more Latin American countries: free higher education. They say, when the country was poor, education was free. Now the country is rich, and education is expensive.

Obviously, Piñera won’t be the one to dramatically raise mine taxes or to embark on a Chavez-style frenzy of “¡expropiase!” But the demands are growing.

Today at 5 am, some 15,000 union workers and 30,000 lower-paid contractors will strike at Codelco to protest the “undercover privatization” of the company. By all accounts much of their concern is fear of the private-sector mentality of company president Diego Hernandez, who was hired from miner BHP Billiton.

The strike will also apparently be joined by students and public sector workers. The government is trying to stoke anti-strike sentiment (wow, a preemptive strike against a preemptive strike?) by pointing to the country’s financial losses from the action and the relatively high pay of mine workers. But I think with the students on their left flank, and wide public support for student demands, we could be seeing the bubbling up of a new wave of resource nationalism in Chile.

Environmentalist=terrorist, Ecuador edition

I have learned three important things about Ecuador in the last day:

-They make a sauce by pureeing a green plantain with peanut butter and spices and then use that on shrimp, stir-fried with chilis and other vegetables. That sounds delicious.

-The national football team needs a bit of work.

-It’s another one of those places where environmentalism is equated with terrorism.

Rain! Snow! Miiiiiiist!

In the Atacama Desert.

Arica gets an average of 1/2 a millimeter of precipitation a year, and this year has gotten a big 3.4 mm. In the Tarapacá region, there are almost 3,500 people displaced by flooding, of all things. Apparently it doesn’t take much to wreck the roads in a region where some spots haven’t felt a raindrop in 20 million years.

Venezuela oil output redux

Venezuela has achieved an important change in international estimates of its oil output. The International Energy Agency, an association of oil-consuming nations, has long been one of the groups with the lowest estimates of Venezuelan oil output. Plenty of observers have said the IEA number was too low, but as a very prestigious body, there wasn’t much anyone could do about it.

The IEA published June 16 the 2011 edition of Medium Term Oil and Gas Markets. I just got a note from the Ministry of Popular Power for Oil and Energy that includes a page of the book, which goes like this:

Speaking of mining in Colombia

Educational video here from Al Jazeera. It could be better — the “shaft” seems to be an adit, and it would be much better if they said what mine this was, rather than just saying it was “in Colombia.” Anyone know? Anyway, take a look — beautiful camera work, if nothing else.

Whither PDVSA? And its debt?

This article is mostly a rehash of the same story I mocked here. It even quotes Luis Pacheco (aka Augusto Rodriguez? Ongoing chuckle for me…) giving the usual line about how nice it is to be in Colombia now. All good.

But one little tidbit grabbed my attention:

Some former PDVSA workers are itching to return to Venezuela–but only after a regime change. “I would return immediately,” said Horacio Medina, a former PDVSA manager who negotiated contract agreements between PDVSA and private companies. Medina belongs to a new fledgling group called Venezuela and its Oil, which he said is made up of engineers, lawyers, and economists who dream of creating a new state-owned oil company to replace PDVSA, an institution so “destroyed” that “you can’t rebuild it,” Medina said in a phone interview from his home in Florida.

People are out there bidding up Venezuelan bonds because President Hugo Chavez is sick with cancer, and they seem to think that an end to his presidency would reduce default risk. But now these folks are advocating to replace the state oil company and make a clean start. That raises some interesting questions about the PDVSA bonds issued under the current administration.

As if Colombia miners didn’t have enough home-grown flak

I’ve gotten a couple notes recently from people who want you, the audience, to know how bad mining is for Colombia. There’s this:

La locomotora minera: Brutal ecocidio contra los colombianos . Translation: The mining locomotive: Brutal ecocide against the Colombians.

And this video here, which arrived with a note saying it had been “banned by Colombian TV.

This video rubbed me the wrong way.

Why are my lungs burning (Part 4, La Paz edition)

Climbing to El Alto from La Paz, Bolivia. Evo wanted this old bus off the road by 2018. Bus drivers said no.

Going to La Paz, Bolivia, where the airport is above 4,000 meters and the main plazas are around 3,700 over sea level, you expect your lungs to suffer. (For those of you unfamiliar, 4,000 meters is about 13,200 feet.) After all, in a normal country, 13,000 feet is the top of a reasonably high mountain, rather than some river valley well below nearby peaks. So the lack of oxygen is predictable. But in spending last week in and around that city, I was unpleasantly surprised at how the political system and people’s values combine to make the air much more polluted than it need be.

Bolivia is a poor country, even by the modest standards of South America. It is in boom, but almost no one has a private automobile. The pollution tends to come from wood smoke, fireworks and most of all, poorly tuned diesel vehicles.

The government tried to raise fuel prices around New Years’. That would have given drivers of buses and trucks a financial incentive to replace old, poorly tuned vehicles. But the government did a lousy job of getting public support for the move ahead of time, instead trying to sneak the measure through over the summer holidays. Popular rejection was swift and brutal, led by the powerful bus drivers’ and truckers’ unions. The government soon backed off.

Then, over the past few weeks, there was another attempt to clear up the air and increase road safety by banning old buses. Owners, many of whom operate their own 15-seat minivans as the country’s primary mass transit system, would have seven years to replace any vehicle that is more than 12 years old. This time, the populace as a whole didn’t rise up in vast marches, but drivers threatened to go on strike and blockade all of the country’s roads. This was now two weeks ago. You didn’t hear about it because it didn’t happen — the government proposal was put on ice again.