PDVSA’s quiet glasnost

Or should we use the local language and call it “apertura”?

Thomas O’Donnell has the story.

…as soon as the late Venezuelan President Hugo Chávez died, the strategy of Petróleos de Venezuela S.A. (PDVSA) became “pragmatism” in the face of “necessity.”

No matter whether you are happy that Venezuela may get its shit together or pissed that Maduro may be in charge when that happens, this is the kind of reality-based, non-ideological reporting that we need more of from Venezuela. Go read it.

7 thoughts on “PDVSA’s quiet glasnost

  1. vijay

    This is a response to China closing down the ATM; once Chavez was gone, the china gusher has stopped. Nothing actually to do with PDVSA management or maduro seeing the light. By the way, I did not believe your earlier projections of cut in Venezuela refined products imports also. There is a need for a major overhaul of Amuay/Cardon refinery. It will need between 1-3 billion dollars.

    1. sapitosetty Post author

      Hi Vijay. It sounds like you want to argue with someone, but I’m not sure that you’re arguing with me.

      I never said the new pragmatism had to do with anyone seeing the light. Neither Tom nor I speculated on why this is happening. Just that it is.

      I apologize if I projected a cut in Venezuela refined products imports. I don’t remember doing so. I have been reporting the US numbers on Venezuela’s purchases of refined products from the USA. These aren’t projections, they are backwards-looking reports on real shipments. Other people have projected a reduction in refined products imports, but I haven’t got the knowledge or intuition to make such a call.

      1. vijay

        No arguments; just plain statements of fact. I do not know enough to argue. However, I do know that the PDVSA amuay-Cardon needs about 2 billion to fix it, because I have the budget estimate in front of me. I know PDVSA is not funding because China shut down the ATM.

        1. vijay

          I may have confused you more than do anything to illuminate you; there are three parts to a solution proposed to PDVSA:

          1. Revamping the A+C refinery flow chart to use hydrocrackers, fluid catalytic cracking , and possibly, petcoke gasifier + hydrogen shift using syngas. These mods cost upwards of 3 billion dollars. The net impact of the changes is to convert most of the crude to usable gasoline + diesel. The flexicoker is o problem-ridden it may have to be replaced. This is not a mess at all. The cost is recoverable in 3-5 years, if and only if:

          2. The gasoline price in Ven. is increased by a a factor of 5-10. The need to increase the gas price is not to make a profit for PVSA, but to bring the mpg in Ven. cars closer to US (notice I am not even saying closer to Europe, that is beyond the scope). This will reduce the number of gasoline barrels consumed per day, and will eliminate imports.

          3. Shift CORPOVEN from furnace oil to flared gas.

          Of the above 3, 1 is doable, 3 is probable, I dont know how 2 will be done.

          I hope you now understan my two earlier emails; China as the ATM is not the answer. The answers are already in Av. Libertador La Campiña 169. Just don’t know who will bell the cat.

          Separately, PDVSA has alienated most service providers and vendors by paying them 2 or 3 years late. They have to smooth those bridges.


  2. Tom ODonnell

    Steve – Such an endorsement, esp. coming from a veteran investigative reporter, is much appreciated and encouraging.

    Thinking about your glasnost commentary: it strikes me that the opposition has to take up-to-date account of any increase in production by Pdvsa – to adjust their critique of chavismo. Not just in barrios, but, say, if the private sector does increase its business with Pdvsa as planned, then that sector will feel the political message is out of step..

    Anyway, it may end up that, aside from the obvious hits to managerial and technical competence due to the paro, that Chavez was himself the biggest obstacle to carrying though what needed to be done to maintain production. Pdvsa’s incapacity to produce has been an anomaly in OPEC. Let’s see if Maduro/Cabello panic before elections and order Ramirez to turn over cash and personnel to campaign, then no matter what Pdvsa does, it will fall back again to where it was.

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