Venezuela - Buying oil from Russia

Why is the world's fifth largest producer of oil buying it from the Russains? Because Chavez is doing what all dictaors do - stealing it.

The Financial Times has the story but you have to pay for it. So, here's a free souce.

In 2005, we wrote about "Venezuela's oil receipts," and the significant questions being raised, including a "shortfall in PDVSA cash deposits to Venezuela's central bank" of "perhaps by as much as $2 billion."

The trail of that story grew cold, but the questions did not. In fact, little has changed. In 2005, we reported that the alleged shortfall was "not totally verifiable, since PDVSA has not filed papers with the SEC in at least two years."

Indeed, no one really knows what PDVSA's books really hold. As we reported recently, Venezuela is no longer going to report PDVSA's finances to the U.S. Securities and Exchange Commission.

And like all dictators, Chavez is ruining the infrastructure.

In the article we noted: ["Stratfor.com estimates that since Chavez became president, starting in 1998, "PDVSA has lost about 1.5 million bpd of its net crude oil production." The main reasons have been the replacement of capable engineers and workers who disagreed with Chavez's revolutionary views, with inexperienced, and in many cases incapable replacements, and the lack of attention to infrastructure maintenance and improvement. The result of the bad management and neglect, has been the steady erosion and near incapacitation of a major oil-producing region of Venezuela, the Western portion of the country, where as many as 10,000 wells have been estimated to have been rendered mostly useless. Venezuela is nominally the world's fifth largest oil producer."]

So how's Chavez's nationalization of Venezuela's oil industry going?

According to the Times quoting "Under President Hugo Chávez, PDVSA's oil output has declined by about 60 per cent, a trend analysts say has accelerated in the past year because of poor technical management."

But according to some of the Left, it's all our fault.

While Iran's getting all the attention, and blame, over rising oil prices, Venezuela's oil problems are under the radar - for now.
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