The new road climbing out of the Amazon into the Andes
Chinese premier Li Keqiang is to push controversial plans for a railway through the Amazon rainforest during a visit to South America next week, despite concerns about the possible impact on the environment and on indigenous tribes.
Currently just a line on a map, the proposed 5,300km route in Brazil and Peru would reduce the transport costs for oil, iron ore, soya beans and other commodities, but cut through some of the world’s most biodiverse forest.
The six-year plan is the latest in a series of ambitious Chinese infrastructure projects in Latin America, which also include a canal through Nicaragua and a railway across Colombia. The trans-Amazonian railway has high-level backing. Last year, President Xi Jinping signed a memorandum on the project with his counterparts in Brazil and Peru. Next week, during his four-nation tour of the region starting on Sunday, Li will, according to state-run Chinese media, suggest a feasibility study.
The criticisms are similar to those that met the Interoceanic Highway project along the same general route a decade ago. When I traveled that road in 2011, when it was mostly paved but still missing a couple final links, I found that the most of the predictions of doom had failed to come true, while there were some clear benefits from the road construction. However, the bad news may have been bubbling away, and I haven’t been back to see if things stayed so positive once the road was fully open.
Time to go back!
Yeah, Otto, it’s a coincidence. Colombia is importing more from lots of countries, not just the USA.
All figures from here. 2014 numbers are just through October, so that decrease is likely to disappear in final figures. As you can see, the big winners since 2010 have been Mexico (free trade agreement since 1995) and China (no free trade agreement), much more than the USA.
Commodity price trends and changes in Colombian access to consumer credit (for Chinese knickknacks) are probably bigger factors in this chart than trade agreements.
A tweet by the Devil alerted me to this remarkable WSJ story.
It says Goldman Sachs, via an entity called “Oak Finance Luxembourg SA,” loaned $835 million to Banco Espírito Santo just weeks before the Portuguese bank collapsed. That is remarkable because Goldman also owned more than 2% of the bank.
The loan was meant to cover a risky loan that Espíritu Santo had made to Wison Engineering of China and Venezuelan state energy company Petróleos de Venezuela SA, as they upgraded the Puerto la Cruz refinery.
When Espíritu Santo collapsed, Portuguese authorities broke it up into a good bank and a bad bank. The bad bank kept the bad name and the bad assets. Goldman’s loan had gone over to the good bank, where it could have been repaid in full. But
The Bank of Portugal decided … the loan should … remain at the “bad bank” that kept the Banco Espírito Santo name and its worst assets… Goldman Sachs and its clients could lose hundreds of millions of dollars from investments in Oak Finance notes backed by the loan…
UPDATE: I learn that The Devil’s Excrement and Armas del Coronel blogs had these documents years ago. I missed them at the time. Credit where due!
Oil geeks and Venezuela-watchers might remember that in early 2010, a delegation of Venezuelans went to China to request a $40 billion loan and came back with a new $4 billion loan. This was the first part of the ongoing lending by China of money to Venezuela to be repaid in crude oil and fuel oil. That in turn led to new agreements in 2011. These deals have gotten a lot of attention, but much of what has been said has been poorly backed by information about the real content of the Venezuela-China deals.
Turns out, a collection of financial documents about these deals has been online since late 2011. Here you go, yours at no extra charge. Most of them appear to be late-phase drafts, rather than signed documents. But they are certainly close enough to final that they can give people discussing these deals a bit of grounding in reality, rather than the just making stuff up.
Included in this collection:
A trip report for President Chávez, describing exactly what happened in Beijing on the trip from February 2 to 4, 2010. Continue reading
It looks like some lousy record-keeping. But even if these last two tables have to be added together, 2014 is turning out to be the biggest year for PDVSA lobbying since at least 1998. Not likely to exceed Statoil’s 2007 record, but still, pretty healthy spending.
I guess those possible sanctions on alleged human rights violators were going to pose some sort of threat to Citgo.
Of course, none of these state oil companies can compete with ExxonMobil:
I recognise Francisco Javier González and Glenbert Croes. Who else is in this picture? Any information will be helpful.
Click for full size
Send tips to firstname.lastname@example.org or just leave a comment on this post. Thanks.
UPDATING: Thanks to Otto, the Devil, Boz, and my sister for pointing out the name tags on the table and/or the names in the video. The problem is that Abraham Reek and Martino Schiera, for example, have so little Internet paper trail that I am unsure if they are using their real names. I’m hoping that people who know these folks will come forward.
Items from Rafael Ramirez’s press conference today:
- Of the $3.78 billion in promised financing for Junin and Carabobo blocks, at least a few hundred million are going to be in “vouchers” that were given to Chevron, Eni and other companies as compensation for the nationalization of oilfields in 2006. I have never noticed these vouchers being recorded as debt on PDVSA’s books, so they probably shouldn’t be counted as income now.
- Plans are now for two joint-venture refineries in China, down from three.
- Oil shipment breakdown now 1 million bbl/day to USA, 100,000 to Cuba, 460,000 to China, 40,000 to Uruguay, 50,000 to Petrocaribe countries, 25,000 to Nicaragua, 12,000 to Bolivia, 80,000 to Belarus. Am I the only one who sees a fair potential for double-counting here? We know that China mainland doesn’t get 460,000 barrels. Does CNPC trading take barrels from Venezuela and sell them to the USA? Probably. And isn’t Nicaragua a Petrocaribe signatory? And really? Belarus? Over what time period are they getting 80,000 barrels a day?
- The new $20 billion China credit is for non-oil projects, half in yuan.
- Information exchange with the U.S. is going to restart. I wonder if that means that we can benefit from the U.S.’s extensive research into energy efficiency and refinery safety, for example.