Tag Archives: oil

Arevenca end game? González jailed in Venezuela (Updates on everything #1)

Yes, this blog is mostly shut down, as I am now working full-time. I’m just updating some old stories. Please note that this is just my personal research and thoughts, no connection to my employer.

Maybe you remember Arevenca. It’s mostly a guy named Francisco González, with a few colleagues and family members. Using the name of a defunct sandlot on the coast of Venezuela, Arenera de Venezuela CA, he pulled a series of big, long cons over the last decade. They include:

I first covered Arevenca here and I wrote about it in Vice and CJR.

As you can read in the Vice story, González and a string of accomplices — some of them apparently themselves victims of the deception — hit a home run with the Díaz family in Puerto Rico, extracting US$7.8 million for a nonexistent shipment of asphalt. The Díaz family has been going after him for years in Aruba, Puerto Rico and Spain. A month ago, after González failed to show up to court in Spain too many times, the court issued this arrest warrant:

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Soon, Venezuelan authorities arrested him for possible extradition to Spain.

After a few relatively quiet years, González had just recently popped up again. First, the Arevenca Bank website was redesigned.

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And then there was this letter to Venezuelan Trade Minister Jesús Farías, offering Arevenca’s British Virgin Islands corporation as a source of US$10 billion in financing for food imports to Venezuela.

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In addition to all of this, González is also facing legal processes in the USA. And Aruban authorities auctioned off his helicopter.

Whether González ever goes to trial, however, is an open question. Article 69 of the Venezuelan constitution says “Extradition of Venezuelans is prohibited,” and the Venezuelan justice system isn’t exactly a model of efficiency. But in any event, this guy seems to be nearing the end of his run.

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Colombia, Venezuela get opportunity to overcome oil addiction. You’ll believe what happens next.

Venezuela and Colombia, where I’ve been hanging out for the last couple weeks, are terminal oil junkies. Both countries have built economies so oil dependent that with the current low price of crude, people are freaking out.

Of course crisis=opportunity and all that, so what better way to stimulate the local economy and set the countries up for the next cycle than invest in renewable energy? Good time to build some wind farms and microhydro projects, you might think. Good time to lay some solar panels onto reservoirs, you might think. Well, that’s not what’s happening.

In Venezuela, the government is bragging that it’s reactivating mature oil wells. And as the government faces the country’s worst financial crisis since at least the 1990s, it continues to give away gasoline to anyone who can take it. Free. Seriously. Younger people with dollar signs in their eyes are now investing their cash into oil, too. The folks behind Derwick Associates, led by Alejandro Betancourt, have spent about $250 million on shares of Bogota-based oil company Pacific E & P (formerly known as Pacific Rubiales), while their pal Francisco D’Agostino is part of a group that is putting more than $30 million into Harvest Natural Resources, a Texas oil company. Everybody’s betting on oil.

Here in Colombia, I heard Finance Minister Mauricio Cárdenas address an oil conference. He told the crowd that his country is committed to maintaining oil output at 1 million barrels a day or more, despite the fall in oil prices. “That’s why it’s important for the hydrocarbons sector to have all the stimuli, all the incentives, so that in this low-price scenario, it can invest, it can explore, and most of all, increase production. This is fundamental for the national economy, and indispensable for the public finance of the country.” (Link to story about his speech here, but the quote is from my own recording.)

The same day that he spoke, August 26, this report came out:

The consequences of global sea level rise could be even scarier than the worst-case scenarios predicted by the dominant climate models, which don’t fully account for the fast breakup of ice sheets and glaciers, NASA scientists said today (Aug. 26) at a press briefing.

What’s more, sea level rise is already occurring. The open question, NASA scientists say, is just how quickly the seas will rise in the future.

So you have these two tropical, coastal countries, facing the loss of their coral reefs and atolls, not to mention their glaciers and the unique alpine moors called páramos. Two countries that depend on a robust, constant hydrologic cycle for their energy supply and their basic survival. And their reaction to a crisis in the oil industry is to keep investing in oil.

Humanity! Never change.

Gold-oil ratio goes wild

Gold miners can now buy 30.33 barrels of West Texas Intermediate crude oil for every ounce of gold they sell. That is the most in at least 15 years.

Oil-gold ratio

If history is any guide, I’d expect that extreme reading to revert to the mean, which would require cheaper gold or pricier oil. But for now, gold miners are doing great. Which is probably why their stock index looks like this:

GDX index weeklies

Oil corruption in icier climes

Screen Shot 2015-04-27 at 7.20.55 PMI focus a lot on energy industry corruption in Latin America and Latinish America (Texas, California), but please don’t get the idea that oil stinks worse in southern latitudes. No, you can pretty much count on the energy industry attracting interesting characters like flies to shit.

You have drivers, power plants and other fuel-burners demanding USD2 trillion a year worth of gunk to be pulled out of the ground, refined and shipped to their far-flung machines. The companies who comply with this demand do what they can to seal the oil and its derivatives hermetically into pipes and tanks and tubes and ships. When all goes right, the stuff never sees sunlight before it’s burned. In the other direction, money is supposed to be just as well contained. Credit cards slide into gas pumps, letters of credit are transferred from power plant operators to refiners, tax collectors take their direct deposits, and money travels back up the line, retracing the route of the oil. But with so much money. So much money. So much money at stake, you just can’t stop people from trying to poke holes into the system. It’s too tempting. They can get physical oil, or much better, get virtual streams of cash, never contaminating their silk ties with the stink of sulfur and pitch.

Here in Canadialandia, land of the Canadialandians, the desire to extract a bit of money and power from the oil system is as irresistible as anywhere else. A new publication is chronicling the local money and power games: National Observer.

Subscribe to its tweets since the kids these days refuse to provide an RSS feed and since “following” something on Facebook is unreliable. Thanks to Jesse Brown of Canadaland, chronicler of happenings here in Canadialandia, land of the Canadialandians, for highlighting National Observer on his podcast. If you care about Canadian politics you can subscribe to his podcast — which wisely does have an RSS feed.

Otto does PREC

A few interesting Pacific Rubiales items recently, picked up by the always attentive Otto at IKN. Go over there, he’s better at this blogging stuff than I am.

For what it’s worth I watched the video he linked there, and I thought it desperately needed an edit. And I hate, hate hate documentaries with looming drama music. But if for nothing else, it’s worth watching the video to see the spectacular video of the Colombian llanos that are being exploited for both petroleum and palm oil these days. Good to know what kind of paradise you’re wrecking every time you fire up the old V-8.

Joker brokers still snagging suckers

Today I got another mail from a perfectly nice-sounding guy who had been invited into a deal with a shady broker offering oil, which he was going to buy and then turn over to some shady client. I’m amazed that there are still thousands of people out there trying to do this sort of work every day. To make life easier for all of you, here is a flow chart to help you decide whether to accept a “mandate” from some supposed buyer and then use that to buy “oil” from a “refinery” you find on the internet.

In case of any ambiguous answer, skip right to "fuck no"

 

Citgo was biggest client for top DC lobby firms in 2014 (Updated)

CITGOLogoBWCitgo Petroleum, the US refining subsidiary of Venezuelan state oil company PDVSA, had a big year on the lobbying front in 2014. According to current records at OpenSecrets.org, the company spent $2.16 million on DC lobbying, a five-fold increase over 2013. It was the 9th-biggest among the 100+ clients of  Cornerstone Government Affairs and fourth-biggest at Brownstein Hyatt. But it really shone by becoming the biggest client of the year at both Dutko Grayling and Squire Patton Boggs.

Patton Boggs client ranking per records at OpenSecrets.org. Current as of Jan 25 2015.

Patton Boggs client ranking per records at OpenSecrets.org. Current as of Jan 25 2015.

Yes, that Patton Boggs. From Ken Silverstein’s article on the lobby house from last week:

And no one is, or was, more symptomatic or responsible for this pathetic state of dysfunction than Thomas Hale Boggs Jr., who died last September… Boggs was a richly-paid lobbyist who ran his firm like a brothel, once saying, “We pick our clients by taking the first one who comes in the door.” With that as his guiding principle, Boggs and his firm compiled a client list that included America’s biggest, most criminally minded corporations and the world’s worst dictators.

Really a worthwhile read, so go click over there. It takes a lot of work to be the #1 client of Patton Boggs. The company had 179 paid clients last year. Following well behind PDVSA you find companies with massive regulatory worries. (Note that all figures were current at time of writing. Future disclosures may change the ranking.) So what was all that money spent on? Continue reading