Archive for the ‘oil’ Category

Keystone XL & Venezuela

Tuesday, November 18th, 2014

Caracas Chronicles (emphasis added):
Keystone XL Isn’t a Threat to the Environment; It’s a Threat to Venezuela

The whole idea that if you stop Keystone XL, somehow less oil is produced and consumed is infantile: the question isn’t “how much?” it’s “where from?” (And if you think exploiting the Orinoco Belt is less environmentally dicey than piping oil through Nebraska, there’s a mountain of coke in Jose I’d like to sell you.)

If the Venezuelan government had the bandwidth to think longer term – which it manifestly doesn’t – it would grasp Keystone XL as a key strategic threat. The main reason anyone would want to take Canadian oil to the Gulf Coast is because that’s where the refineries that can handle crappy, high-sulphur, high-tar content crude are. And the whole reason they’re got built there in the first place is to handle Venezuelan crude. This is why KeystoneXL is such an important piece of the North American Energy Independence puzzle: it’s what it takes to shut Venezuela out of the North American market.

Of course, a government that’s long made it positively a policy goal to shift Venezuelan production away from the U.S. may not be able to register that as a threat. Ideology is always going to prevail with them. But that’s only the umpteenth policy mistake the Venezuelan government made today before breakfast.

Even in a post-Keystone XL future where Venezuela doesn’t have access to North American energy buyers, Venezuela will find buyers for its oil, of course. It’s just that it will have to ship that oil further to get it to refineries that will need to be reconfigured (or built from scratch) to handle it, and each part of that costs money: money Venezuela could use for any of the thousand pressing and growing policy problems going unaddressed right now.

The Communist regime in Venezuela finances itself and its parasites, including Cuba, through oil proceeds, all the more reason to approve KXL.

UPDATE:
Linked to by Dustbury. Thank you!

Venezuela: Oil slide

Saturday, November 15th, 2014

From commenter Kermit,

Venezuela is importing oil as a direct result of its disastrous refinery fires a year ago. What is being imported is light sweet crude to act as diluent when blended with the very heavy crude oil so that it can be pumped from the fields to the terminals/refineries.

Without fully functioning refineries/upgraders, no diluent is being made (kind of like diesel)

Also being imported is diesel and gasoline.

There is severe ship congestion since terminals are not set up to receive the crude oil and refined products. Long waiting times (meaning a lot of extra cost in demmurage to shipowners)

Meanwhile, Venezuela Dollar Income Falls 30% on Lower Oil Prices

Venezuela’s average oil-export price last week fell to $72.80 a barrel, the lowest in four years, pushing the yield on the country’s benchmark bonds to almost 19 percent for the first time since the global financial crisis. Oil accounts for 97 percent of foreign exchange income, which the country needs to pay about $28.5 billion of bond principal due in 2016.

To defend oil prices, Maduro said he sent the country’s foreign minister to five oil producers, including Mexico and Russia, to drum up support ahead of the Nov. 27 meeting of the Organization of the Petroleum Exporting Countries, which Venezuela co-founded. Back in the late 1990s, Venezuela ended a slump in oil prices by cutting production along with other OPEC and non-OPEC producers.

To rumors of selling refineries, Caracas Chronicles says, Go bold, go big

Venezuela: last on property rights

Thursday, October 30th, 2014

Hugo Chavez, who expropriated millions of acres of farmland (along with private properties and businesses) left an enduring legacy:
Venezuela ranks last in Property Rights Index
Lorenzo Montanari, the executive director of the Property Rights Alliance (PRA), said the survey measured the “consistency of property rights in 97 countries” and assessed three aspects: political legal environment, physical property rights and intellectual property rights

The IPRI study, which you can read here, corroborates the fact that

there is a positive, strong, and significant relationship between the strength of property rights protections and a country’s economic performance as measured by GDP per capita.

Mike Birds writes that Venezuela’s Decision To Import Oil Is The Perfect Example Of Just How Screwed The Country Is

In other Venezuelan news, Leopoldo López refused to appear before a court hearing on Tuesday, demanding the government respond to a UN resolution calling for his release.

Judge Susana Barreiros scheduled the hearing while the court was not in session, having suspended proceedings indefinitely on October 14. López’s lawyers regarded the suspension as an attempt to delay the court’s response to the UN Working Group on Arbitrary Detentions, which requested López’s immediate release on October 8.

After Spanish Prime Minister Mariano Rajoy called on the Venezuelan government to free Lopez, Venezuela recalled its ambassador to Spain.

Lilian Tintori, the wife of opposition leader Leopoldo López, learned that he could be transferred from Ramo Verde military prison to another jail.



Venezuela and the falling oil price UPDATED

Friday, October 17th, 2014

Venezuelan oil revenues prop up not only the Maduro government but also Cuba, and other countries receive Venezuelan oil through Petrocaribe.

Venezuela Vulnerable to Oil’s Fall
Fears among investors grow that Caracas could default its debt, as crude’s decline exacerbates the country’s recession and widespread consumer shortages.

Oil exporters from Russia to Iran are suffering with the lowest crude oil prices since June 2012. But few are as vulnerable as Venezuela, where a free-spending populist government had already been grappling with a recession, widespread shortages, and massive protests earlier this year.

Analysts expect that the Venezuelan barrel—heavier and more expensive to process than Middle East oil—will have fallen below $80 when officials announce this week’s price on Friday, which would be the lowest since late 2010. Last Friday, Venezuelan officials said their country’s crude had fallen to $82.72, nearly a $10 tumble in a little over a month.

Years ago I estimated that the chavistas need a minimum of $75/barrel for their agenda.

We’ll see what happens if it goes down to that number.

UPDATE:
Steve Hanke on Oil Price Blues (Read: Dangers) for Some

If oil prices stay below $90 per barrel for any length of time, we will witness massive fiscal squeezes and regime changes in one or more of the following countries: Iran, Bahrain, Ecuador, Venezuela, Algeria, Nigeria, Iraq, or Libya. It will be a movie we have seen before.



Venezuela: The next default

Monday, September 15th, 2014

Mary O’Grady writes on more to come from the ALBA deadbeat zone:
Venezuela Heads to a Default Reckoning
Amid bills for imports and debt servicing, and shrinking dollar liquidity, something has to give.

Venezuelan bond prices swooned last week on renewed speculation that the government of President Nicolás Maduro might soon default on as much as $80 billion of foreign debt. The yield on the government bond due in 2022 hit a six-month high of 15.8% on Sept. 9. David Rees of London-based Capital Economics, who last year warned of the risks of falling oil prices to Venezuelan solvency, told Bloomberg News by telephone that “the bond market is finally beginning to wake up.”

That may be true. It’s clear that the foreign exchange that Venezuela earns from oil exports cannot pay its import bills along with debt service. There are dire shortages of industrial and consumer goods as well as services. Something has to give and odds are that allowing the required adjustment to the economy won’t be the government’s first choice.

Nearly 1 million [corrected] barrels per day (almost one third of the daily 2.3 million barrels of crude OPEC says Venezuela produces) don’t generate revenue: 300,000 bpd go to Cuba, some 100,000 bpd are smuggled into the Colombia by insiders, and 650,000 bpd are sent to China to pay debt. This is even more disastrous when considering how the Venezuelan economy has become more dependent on oil after foreign capital leaves the country and productivity plummets.

The ISIS border terror alert Carnival of Latin America and the Caribbean

Monday, September 1st, 2014

LatinAmerJudicial Watch has an Imminent Terrorist Attack Warning By Feds on US Border, which, as Andrew McCarthy explains,

this is not a surprise — particularly less than two weeks before September 11. But it is nonetheless jarring to read.

ARGENTINA
Argentina workers claim general strike ‘successful’
Labour groups opposed to Argentine President Cristina Fernandez say the second general strike of the year has been a success
.

More bat-shit craziness: Argentina contemplates moving capital from Buenos Aires
Buenos Aires is seen as being geographically remote from much of the rest of the country
Buenos Aires could be replaced as capital of Argentina by a city 600 miles to the north [Santiago del Estero], under a plan floated by Cristina Kirchner

BOLIVIA
Bolivia Seizes Guns Bound for Brazilian Crime Outfit, the intended for the gang known as the First Capital Command (Primeiro Comando da Capital, or PCC).

BRAZIL
Other than post-Chavez Venezuela, Brazil is the worst out of 11 countries ranked by a joint study conducted by Brazilian and German economic think tanks.

Brazil Falls Into Recession
Brazil’s economy fell into a technical recession and cut its growth forecast, delivering another blow to President Dilma Rousseff’s re-election hopes.

Inside the all-woman village desperate for men
The women of of Noiva do Cordeiro are “appealing” for eligible men
Video
Harry Wallop visits the small rural Brazilian village of Noiva do Cordeiro, populated by beautiful women who are looking for love

CHILE
Immigration: Minister of Defense Warns Against “Entering Chile without Authorization”

Chile Manufacturing Falls More Than Forecast as Retail Slows

COLOMBIA
Fugitive Colombian Warlord Nabbed in Panama

Hoy en La Noche grupo de cubanos espera en Colombia respuesta a solicitud de refugio político:

CUBA
Why work? You earn more selling three avocados a day.

The Vatican’s man in Havana says Cubans’ only hope for a better life is to escape Cuba

Internet for Cubans vs. Helping Castro’s Censorship

Oh! Oh! Canada: Party girls UPDATE

DOMINICA
Dominica Will Be First Nation with Universal Bitcoin Possession
70,000 Island Residents Get a “Bitcoin Drop” March 2015

DOMINICAN REPUBLIC
Dominican Republic investigate ex-nuncio for pedophilia
Wesolowski appealing def[r]ocking by the Vatican

DRUGS
Drug Use and Drug Spending: How the Washington Post and the President Get It Wrong

ECUADOR
The Future of Dollarization in Ecuador

Ecuador to bring in digital currency
Ecuador says it will introduce the world’s first digital currency issued by a central bank and it will go into circulation in December

GUATEMALA
Jews ‘forced’ from Guatemala villageMen from a Jewish community load furniture onto a lorry in San Juan La Laguna
Some 230 members of an Orthodox Jewish group begin leaving a village in western Guatemala after a bitter row with the local indigenous community.

HONDURAS
Honduras Knocks on Door of Development Bank to Fund ZEDEs
Catrachos Seek Peace with Neighbors in Sensitive Gulf of Fonseca Region

JAMAICA
Jamaican Ends Legal Challenge to Anti-Sodomy Law after growing fearful about violent backlashes.

MEXICO
Mexico Looks to Raise Wages
Mexico City’s leftist Mayor Miguel Ángel Mancera raised pressure on the federal government with a proposal to lift the federal minimum wage—which lags only behind Haiti in the hemisphere—to $6 per day for 2015.

Mexico’s Pemex Forecasts 6.7% Drop in Crude Production in 2014
The head of Pemex’s exploration and production division said production will fall from 2.52 million barrels per day in 2013 to 2.35 million bpd at the close of 2014

More Than 134,000 Petition Obama Admin. to Demand Release of Sgt. Tahmooressi — Here’s the Response They Received Instead

NICARAGUA
Nicaragua Landslide Traps Gold Miners
Rescuers in Nicaragua raced to reach at least 24 freelance gold miners trapped by a landslide, including 20 who have been located and have managed to communicate with emergency crews.

PANAMA
Widened Panama Canal may threaten West Coast port jobs

PARAGUAY
Brazil, Worse Than Paraguay

PERU
Peru Moves Van der Sloot to Tougher Prison

PUERTO RICO
Puerto Rico Lures Franklin as Equity Funds Buy Junk: Muni Credit

URUGUAY
More than 20 companies bid to supply legal pot in Uruguay

VENEZUELA
Venezuelans Feel Less Safe than Any Population on Earth
Residents Rate “Law and Order” Worse than War-Torn Syria

Health Secretary: Venezuelan Medical Care in Critical Condition
Gustavo Villasmil Details How the Brain Drain and Supply Shortages Feed the Crisis

Venezuela’s Black Market Bolivar Slides to Record Low

Venezuela is becoming a crude importer. Discuss.

Chavismo promoting CITGO sale tells us more than what we care to know

There Is Too Much Money To Be Made In The Bolivarian Revolution I: The Gasoline Racket.

“Los venezolanos en el callejón sin salida del chavismo”

The Venezuela Case Study In How Not To Help The Poor

A Proposal of a New Flag from a Opposition Movement to Chavismo and the Bolivarian Republic of Venezuela {Venezuatu}…! THE NEW COUNTRY OF: Venecian Guiana !

HUMOR
HAHAHA You go to the beach and run into Hugo Chavez

The week’s posts and podcast:
A day in the life of the Panama Canal

ISIS border terror alert?

Colombia: Former Pablo Escobar lead henchman goes free

En español: Unidad de quemados

Brazil: 3 beheaded in prison riot

Today’s illegal alien invasion headlines

Argentina: Enter Soros

Peña Nieto goes to LA

Colombia: Was military intelligence hacked?

At Da Tech Guy Blog:
The audacity of taupe

Warren Buffett and his American dollars for Canadian doughnuts

Podcast:
Gloria M Strassburger, author, plus Fausta Wertz editor of Fausta’s Blog


Cuba: The end of the deepwater oil lie

Tuesday, August 12th, 2014

After offshore oil failure, Cuba shifts energy focus (emphasis added)

Cuba has shifted its focus away from offshore oil, concentrating on renewable energy and improving output from onshore wells due to a lack of interest by foreign companies for further deepwater exploration, sources close to the industry say.

That includes China and Russia; after three deepwater wells drilled in 2012 came up dry.

Capitol Hill Cubans blog had a more tactful title than mine, Cuba Ends Deepwater Oil Exploration Illusion.

The really, really big field trip Carnival of Latin America and the Caribbean

Monday, June 23rd, 2014

LatinAmerAll of Latin America is absorbed in the World Cup; all, that is, except for the tens of thousands of unaccompanied Central American children arriving in the United States. This invasion, which until recently the White House ignored – as if it was a really, really big field trip – but now blames on the drug cartels, will not end because the federal government has no intention of stopping this influx, other that throw $250million at it – while doing nothing to secure the border.

ARGENTINA
Argentina’s bonds
A good week for some investors
Vulture funds win a legal victory over Argentina’s government
; The Economist ought to do a little less editorializing on its headlines.

Uh-oh: China backs Argentina’s position on Falkland Islands
Chinese support calls at two-day G77 summit for the governments of Argentina and the UK to resume negotiations on ‘the Malvinas Islands question’

BOLIVIA
Industrialization is Bolivia’s Biggest Challenge, Economy Chief Says

BRAZIL
World Cup 2014: Protests and anger, in pictures

Brazil’s Dilma Rousseff endorsed to run for re-election
Brazilian President Dilma Rousseff has been officially endorsed by the governing Workers Party to run for re-election in October.

CENTRAL AMERICA
Joe Biden Discusses Immigration Reform With Central American Leaders

CHILE
Ending a six-year winning streak, Spain upset after World Cup ouster

COLOMBIA
Support From the Left Helps Keep a Right-Wing President in Power in Colombia

Andres Oppenheimer: Colombian leader starts new term with a great idea

COSTA RICA
5 Things to know about Costa Rica

CUBA
Now under house arrest, Antunez says he wasn’t beaten in jail but Cuban guards did torture his wife

Internet Foils Disinformation Operation Regarding Funeral For Mother of Alan Gross

Cuba Crackdown
Human rights advocates see increased threats against press in Cuba

Castro limos reborn as Havana taxis
Some of Fidel Castro’s old Soviet-built limousines have been decommissioned and are being used as Havana taxis for foreign tourists.

Cuba ends censorship — NOT
For a brief and shinning moment, it seemed that Cuba had unblocked access to several websites censored for years because of their criticisms of the government, including the U.S. government’s Radio/TV Marti.

DOMINICAN REPUBLIC
New US-Caribbean energy initiative

ECUADOR
ECUADOR SEEKS TO CONTROL OPPOSITION MEDIA BY DESIGNATING PRESS A ‘PUBLIC SERVICE’

Ecuador to Take Legal Action Against Using Indian Blood for Research

GUATEMALA
In Guatemala, US VP Biden Promises Hundreds of Millions of Dollars to Stem Child Immigrants Flooding US Border

GUATEMALAN PRES TO US: PASS AMNESTY BILL WITH MORE GUEST-WORKER VISAS

HAITI
U.N. Chief Served Papers in Suit by Haitian Victims, Lawyers Say

Secretary General Ban Ki-moon’s spokesman denied that the official had been served.

HONDURAS
Honduras’ First Lady Says She Will Collect Her Country’s Child Immigrants

JAMAICA
With murder common, Jamaica morgue plans stall

MEXICO
Lawmakers visit Marine held in Mexico, say sergeant ‘needs to come’

Rep. Ed Royce, R-Calif., and Rep. Matt Salmon, R-Ariz., visited Sgt. Andrew Tahmooressi at the El Hongo II prison in Tecate, Mexico.

As far as I could find, VP Joe Biden didn’t mention Sgt. Tahmooressi when visiting with Peña Nieto.

Mexico’s Breakout Moment?

THOUSANDS OF IMMIGRANTS STUCK IN MEXICO STASH HOUSES JUST OUTSIDE US

PANAMA
Panama police say remains may be missing Dutch women

PUERTO RICO
Exclusive: UBS faces criminal probe for Puerto Rico bond fund sales – lawyers

Puerto Rico: Is this any way to run an island?

SOUTH AMERICA
Unesco grants Inca Qhapaq Nan road system World Heritage status
A road system built by the Inca Empire has been granted World Heritage status by the United Nations cultural agency, Unesco.

The Qhapaq Nan roads go through six South American countries

It covers some 30,000 km (18,600 miles), from modern-day Colombia in the north to Argentina and Chile in the south, via Peru, Ecuador and Bolivia.

URUGUAY
From The White House: On Mujica and Castro

VENEZUELA
It’s already out of toilet paper and flour, but now Venezuela Is Running Out of Cookies and Coffins
Thanks to an economic crisis, the list of things you actually can buy in Venezuela seems to be getting shorter every day

As World Oil Prices Rocket on Iraq Strife, Venezuela Oil Price Jumps above $100

The week’s posts and podcast:
WH blames cartels for immigration surge

Argentina: Cristina can’t pay up . . .

Cubazuela: Free healthcare for all

Central American media actively promoting illegal immigration into US

Mexican meth kingpin busted at World Cup

Today’s Google doodle: Boca

The plan

Colombia: The view from Venezuela

Argentina: SCOTUS rules for the creditors

At Da Tech Guy Blog:
The new twist in illegal immigration: Children as human shields for the cartels

5 lessons Hillary could learn from Isabel


Mexico: Drug gangs with tanks attack shale wells

Thursday, June 12th, 2014

Drug Gangs Attacking With Tanks Block Mexican Shale Boom

War Zone

Even though considerable, those obstacles pale in comparison to levels of violence in Tamaulipas that sometimes resemble a war zone. While Chestnut would be interested in looking at opportunities in Mexico at some stage, it won’t be among the first to enter, Chairman Mark Plummer said from Dallas. Security is one of the turnoffs.

“There’s a big difference between Laredo and Nuevo Laredo, but once you get underneath the ground, it’s all the same,” he said, referring to the cities on either side of the border. “Hopefully over time some of that will subside.”

Gun battles raged this spring, with dozens shot dead on highways and businesses burnt down in the Gulf of Mexico port city of Tampico. The capture of a Gulf Cartel founder and arrest last year of Zetas chief Miguel Trevino left a power vacuum that’s renewing fighting between the two groups, and within the Gulf Cartel.

I’ve said it time and time again: Border security is national security.

Mexico: Fracking time

Monday, April 21st, 2014

Along Mexico’s oil frontier, a fracking divide
After the passage of a landmark energy bill, a new mother lode from the south beckons U.S. companies.

Here’s the divide:

The geological marvel known to Texas oilmen as the Eagle Ford Shale Play is buried deep underground, but at night you can see its outline from space in a twinkling arc that sweeps south of San Antonio toward the Rio Grande.

The light radiates from thousands of surface-level gas flares and drilling rigs. It is the glow of one of the most extravagant oil bonanzas in American history, the result of the drilling technique known as hydraulic fracturing, or fracking.

Curving south and west, the lights suddenly go black at Mexico’s border, as if there were nothing on the other side.

This is a reflection of politics, not geology. The Eagle Ford shale formation is believed to continue hundreds of miles into Mexico, where it is known as the Burgos Basin. But while more than 5,400 wells have been sunk on the Texas side since 2008, Mexico has attempted fewer than 25.

There’s the Texas oil boom:

The shale boom is the main reason the United States is challenging Saudi Arabia and Russia to become the world’s top oil producer. Texas pumps more than a third of U.S. output, and on its own the state would rank as the world’s ninth-largest oil producer.

The situation in Mexico gets complicated by the Batial-1 well site being in an area controlled by the Zeta drug cartel. All the more reason for the US to strive for full energy independence.