Chavez is deeply in debt to the Chinese, having borrowed $4 billion just this week. In exchange, he’s saying that Venezuela will double its exports of oil to China,
Mr. Chavez announced that China would see more fuel oil shipped from Venezuela, the largest oil producer in the South America. The export will keep rising until 2010 or 2011, reaching 1 million barrels per day.
Minister of Energy and Petroleum and President of Petroleos de Venezuela Rafael Ramirez claims that PDVSA will be producing 5.8 million barrels per day in 2012. Gustavo Coronel knows this is nonsense.
Just last year Venezuela was buying oil from Russia in order to avoid defaulting on deliveries to clients.
That said, Petroleum World, the BBC and the IHT report that an Offshore oil discovery could make Brazil major petroleum exporter
A huge offshore oil discovery could raise Brazil’s petroleum reserves by a whopping 40 percent and boost this country into the ranks of the world’s major exporters, officials said.
The government-run oil company Petroleo Brasileiro SA, or Petrobras, said the new “ultra-deep” Tupi field could hold as much as 8 billion barrels of recoverable light crude, sending Petrobras shares soaring and prompting predictions that Brazil could join the world’s “top 10” oil producers.
…
“Brazil’s reserves will lie somewhere between those of Nigeria and those of Venezuela,” Gabrielli said at a news conference.
Additionally,
The senior minister in charge of the cabinet, Dilma Rousseff, said if the deposits turned out to be as significant as first thought, it would place Brazil in the same league as Venezuela and countries in the Arab world.
Last year there was another large discovery in the Gulf of Mexico.
Clearly, the development and extraction of the oil fields is still years away, and also, there’s a bigger question: Is the oil recoverable?
That is a good question. Brazil claims that
The state-controlled company says the results show high productivity for gas and light oil – the best quality oil – which is more valuable and cheaper to refine.
Getting that oil out of the Earth’s crust is a formidable challenge, but most of Brazil’s oil lies off its Atlantic coast, and Petrobras has become a global leader in ultradeep offshore oil extraction.
I continue to be optimistic about Brazil.
When it comes to Venezuela, I have mentioned previously that the Venezuelan economy collapsed after the oil boom of the 1970s. This can happen again.
UPDATE
Others blogging on this:
Bad Debt
Gateway Pundit
Gustavo Coronel
Memeorandum
Protein Wisdom
Venezuela News and Views
Welcome, Weekly Standard readers, and please visit often. While you’re here, you might want to visit the Carnival of Latin America and the Caribbean.
I would watch for the saber rattling that is sure to follow. The Bully will covet his neighbor’s good fortune!
You are right on the money, OS. Hugo won’t be going down quietly.
First Hugo buys millions in equipment from Russia… then he has to get oil from them to meet his contracts to China.
Say, just how much in debt is Hugo to Vlad these days?
That is an axcellent question, Jacksonian.
The Bolivarian Revolution is costing plenty, and oil isn’t paying for it all
Take a look at this article
http://www.latimes.com/news/opinion/la-oe-naim10nov10,0,1470504.story
Hugo Chavez’s criminal paradise
template_bas
template_bas
Under the anti-globalization president, Venezuela has become a haven for global crime.
By Moises Naim
November 10, 2007
While President Hugo Chavez has been molding Venezuela into his personal socialist vision, other transformations — less visible but equally profound — have taken hold in the country.
Venezuela has become a major hub for international crime syndicates. What attracts them is not the local market; what they really love are the excellent conditions Venezuela offers to anyone in charge of managing a global criminal network.
A nation at the crossroads of South America, the Caribbean, North America and Europe, Venezuela’s location is ideal. Borders? Long, scantly populated and porous. Financial system? Large and with easy-to-evade governmental controls. Telecommunications, ports and airports? The best that oil money can buy. U.S. influence? Nil. Corrupt politicians, cops, judges and military officers? Absolutely: Transparency International ranked Venezuela a shameful 162 out of 179 counties on its corruption perception index. Chavez’s demonstrated interest in confronting criminal networks during his eight years in power? Not much.
While this situation has so far been rather invisible to the rest of the world, it is patently clear to those in charge of fighting transnational crime. Anti-trafficking officials in Europe, the United States, Asia and other Latin American countries are paying unprecedented attention to Venezuela. These officials are not particularly interested in Venezuelan politics or in Chavez’s policies. All they care about is that the tentacles of these global criminal networks are spreading from Venezuela into their countries with enormous power and at great speed.
The numbers speak volumes: About 75 tons of cocaine left Venezuela in 2003; it is estimated that 276 tons will leave the country this year. Before, the main destination was the United States; now, Europe is increasingly the target. Italy and Spain are two new important and lucrative end-user markets, and earning in euros is undeniably better than getting paid in dollars these days.
A senior Dutch police officer told me that he and his European colleagues are spending more time in Caracas than in Bogota, Colombia, and that the heads of many of the major criminal cartels now operate with impunity, and effectiveness, from Venezuela. The cartel bosses aren’t exclusively Colombians — there are Asians (especially Chinese) and Europeans too. Caracas’ most posh neighborhoods are home to important kingpins from around the world, including some from Belarus, a country that Chavez notably has visited several times.
Venezuela appears near the top of lists compiled by the anti-money-laundering authorities as well. Money moves in and out, and not just through electronic inter-bank transfers. The combination of private jets, suitcases full of cash and diplomatic immunity has opened up new possibilities. Recently, one Venezuelan member of the boliburguesía — the new mega-rich — was caught carrying at least one suitcase full of money. He was discovered by a customs officer in Buenos Aires but not arrested. Turns out he was traveling on an executive jet with senior members of the government of Argentina’s president, Nestor Kirchner.
In Uruguay, an outraged legislator dropped this bombshell a few weeks ago: A group of Venezuelans had engineered the sale of Iranian arms and munitions to his country, using Venezuelan companies as a cover to bypass the U.N. embargo on Iran’s arms trade. Likewise, the guerrillas in Colombia seem to have no trouble acquiring weapons — many of which come through Venezuela-based arms dealers.
Diamond traders are doing equally well. “Venezuela is allowing massive smuggling of diamonds,” stated a recent report by Global Witness and Partnership Africa, two respected nongovernmental organizations. They recommended that Venezuela be expelled from the Kimberley Process, the U.N.-sponsored mechanism designed to combat the smuggling of “blood diamonds” — the gems sold to fund military conflicts around the world.
And as if diamonds, guns, drugs and tainted money weren’t enough, human traffickers have made their way to Venezuela as well. The country has become a haven for human traffickers because its laws offer so little protection to their victims, especially women. It is also a major stopover for illegal immigrants from China, the Middle East and other parts of Latin America who are on their way elsewhere. They can obtain a Venezuelan passport in a matter of hours.
The great paradox of this terrible story is that, despite Chavez’s constant denunciations of globalization, he hasn’t protected Venezuela from its worst consequences. His nation has been globalized — by criminal gangs. And they import and export corruption, crime and death. And that may be more critical in shaping Venezuela’s future than any of Chavez’s political experiments.