One hundred years of oil

Zumaque IYesterday marked the 100th anniversary of commercial oil production in Venezuela. On July 31st 1914, the Zumaque I oil well in Mene Grande, Zulia, became the country’s first oil well. In its initial years, the 135-meter deep well produced 264 barrels of oil per day.

Zumaque I has been an eyewitness to many of the country’s most significant developments. In 1936, the well was the stage where the first oil-worker strike was decided. It was also the setting for Carlos Andrés Pérez’s nationalization of the oil industry in 1976. More recently, a group of oil workers met at the well to pledge their support for Maduro and the revolution.

The well is still working, symbolically producing about 12 barrels per day, but the role it plays in our country cannot be measured in barrels. In spite of its significance, no major celebrations were planned to commemorate the date. The history of oil in the last one hundred years is the history of Venezuela as well. This, however, escapes the absurd revolutionary narrative that claims the history of Venezuela began in 1998.

So, in honor of the date, let’s pause for a moment and thank Zumaque I for his hard work. He may look like a bunch of worn out screws and bolts, but personally, I can’t help but feel nostalgic when I look at pictures of him. Presidents have come and gone. Ideologies have fallen in, and out of, and in favor again. Yet through it all, there was Zumaque, swivelling, simply doing its job.

The people who put Zumaque I in place were trailblazers, adventurers wandering about a forgotten backwater. Little could they imagine that this malaria-infested field held incredible and unknown riches underneath.

My family’s history could not have happened had it not been for these folks, and for the massive oil wealth Zumaque I helped usher in. My grandfather fled the horrors of Weimar’s Germany after hearing of the enormous promise of a tropical, far-flung place called “Maracaibo.” If you’re Venezuelan and you stop to think about it, I’m sure that you’ll conclude oil has affected your family and your personal history as well – in ways both good and bad.

Who could have thought that the act of ingenuity of the first geologists, that this well made of steel and wood and dreams, would spur wealth, decline, revolutions, and basically, end up building (and destroying) a nation?

So, happy birthday Zumaque ol’ buddy. Thanks for doing your job. We’ve screwed everything up mightily, but it’s not your fault.

28 thoughts on “One hundred years of oil

  1. The story of Venezuela’s oil boom is little different than our 49’ers hunting for gold in the Sierra Nevada’s in the 19th century. Fortunes were made and lost in a heartbeat. Oil. Gold. Instant wealth to a few fortunate individuals, and then likely squandered in the gambling halls and bordello’s. Perhaps Venezuela’s oil boom has indeed turned out to be the ‘devils excrement.’ This all reminds me of a great film in the late 60’s, Kelly’s Heroes. A small bank behind German lines is robbed by a group of enterprising American soldiers. These ‘entrepreneurs,’ little different than the old Venezuelan wildcatters, make-off with this incredible wealth for their own personal enjoyment. Great film! I dedicate this song to ole Zumaque I.

    “Burning bridges lost forevermore…..”


  2. But it is its fault…

    OIL, that “black gold”, “the devil’s shit”, that economic system has defined our culture and subsequently our politics for 100 years in a pretty bad way. Not that it was better before, yes, we were a backwater coffee producing country. So surely it was fine to win the lottery… but like many people who win the lottery, actually saving the money and investing it in your future tends to NOT be what people do with the lottery. Oil, with its open-a-hole-and-riches-come-out, instant wealth, nature has defined the incentive structure of individual Venezuelans and Venezuelans as a collective. From it we get the “mata tigre” easy money mentality that permeates our citizenry… not to mention it has stifled our incentive to diversify or EVEN CARE about other industries (pa que, si tenemos petroleo!). As the government has complete control (or partial control) of this massive wealth, it does not rely on taxation as a means of revenue so it doesn’t have to give back to the citizenry (unless it feels like it). Our oil stained government has ALWAYS been marred with corruption because ‘cuando hay pa repartir’ who is not going to put their hand out? It is no coincidence that the more money we get with oil, the worse our governments behave. Chavez only became more powerful and autocratic when the price of oil skyrocketed due to that demand from India and China that will never end, presumably. With great power, comes great responsibility. But Venezuelans are not spidermen, our politicans are not from mars, they’re Venezuelans responding to incentives, and oil does not incentivize us to be responsible, it incentivizes a party where you make it rain.

    I curse the day we got oil, for it was really the worst day. Yes, countries like Norway do just fine with their resources, but they are the exception, not the rule. The middle east, Iran, along with a myriad of countries in Africa, all know what we mean when we say “so much wealth, but so much misery”. Meanwhile many countries (even in our region, hello costa rica) don’t have shit and have managed to prosper.


    • “I curse the day we got oil, for it was really the worst day.” Ah, so many people in Venezuela think that way, and yet it is a mistake. Oil rents are an immense blessing. Think of the people that have received an education thanks to it, the roads built, the trips made, the gas tanks filled, the stuff imported, the technology, the knowledge. None of that would have been available to us had it not been for oil.

      Venezuelans tend to think, subconsciously, that if it weren’t for oil we would be Austria. Instead, if it weren’t for oil, we would be Haiti, or Paraguay, or Bolivia. Oil isn’t the problem, it’s a huge blessing and our only ticket out of this mess in the future. It’s the institutions that we created that are the problem.


      • We could be Colombia without FARC. Why without FARC? I believe such a movement would have had a much difficult time in Venezuela because of the way our population is distributed – mostly on the coast and the relatively small Andean region.
        But of course, history is not really a science, we can only speculate.


        • I don’t think Venezuela’s agriculture has the potential of Colombia’s. And also, Colombia has more of a tradition for knowledge and education than we ever had.


          • dont know if Colombia has more potential, but looking at the map those huge plains in Portuguesa, Barinas, Apure, Guarico, Anzoategui, etc, seems like we could feed the whole world


            • It’s a little bit more complicated than that, I have to agree – to a certain extent – with our oil-loving Maracucho: Colombia ha more area for agricultural exploitation, more or less the same area that is good for cocaine production. We have a big problem with the Llano, as Alexander von Humboldt realised 200 years ago.
              The Llanos requires huge initial investments to produce. Something few people from the Caribbean realise:

              1- The Llanos are either completely flooded or dry depending on the season
              2- Unlike the Nile basin, the soil in the Llanos gets hardly any nutrients. The minerals that flow from that side of the Andes tend to be insufficient for any kind of agriculture, let along intensive one. This can be surmounted but investment and above all long-term thinking is needed, something that seems to be lacking under a lot of farmers there

              The by far most fertile land of Venezuela is where my granddad was a farmer: the Valencia Basin (and areas in Táchira). Right now 99.9% of the first area and a lot of the second is built up, full of cement, shanty towns etc…and a lot of the people living there are first, second, third generation Llaneros.

              As Humboldt said, the Llanos are a potential but could be our perdition. He said that ff the central government didn’t see to its proper development (and he even presented some suggestions, not bad for his time), the Llanos would become a problem for Venezuela.

              That has been the case: the worse civil wars in the XIX century came from the Llaneros…and the people who are in power now are people born in areas ranging from Barinas (Chávez) to Monagas (Cabello, Carvajal)


              • llanos are far from “completely” flooded on the rainy season, a big part of it is flooded, but vasts plains remain available in the rainy season, nearly in all states there are more than enough lands to produce a lot of things.

                Also, all mass agriculture require some level of technification in order to be efficient, I don’t think the situation is as bad as Humbolt said 200 yrs ago when they didn’t have modern fertilizers and machines, acording to this table of the world bank Venezuela has more arable land % than Colombia with less population,

                Again, probably the pastures are greener in Colombia than here, I have no idea of what they’re doing over there, but we have potential to feed the world instead of having the world feed us.


          • And what’s the motivation to learn and educate yourself when oil is here to pay your bills ?

            Oil is a curse.


          • Yes and yet we wouldn’t have had the level of Bolivia or Haiti, Juan, ever.

            We weren’t at that level in 1910. In fact: already back then there were a few crazy European immigrants in Puerto Cabello and, I believe, even in Maracaibo and they came for some reason they wouldn’t have found in Bolivia and definitely not in Haiti.

            We didn’t have major ethnic problems: unlike Bolivia and Haiti, most of the population was very mixed with a clear Hispanic influence, almost all spoke a language with book production (few Haitians spoke French back in the day, the Creole to French is one additional effort). Unlike Bolivia, Venezuela has always enjoyed easy access to more developed areas. Unlike Haiti, it has much more land and it was not as environmentally compromised back as it was the case with Haiti already.


      • I agree, without oil we could possibly be worse than Bolivia, and also a big chunk of the middle class families have been able to survive these 15 years of storm in no small part thanks to investments made in the “4th republic”, in the “Saudi Venezuela” era.

        The main problem we have is that due to corruption and the squandering of the resources, we are not even reaching 5% of what we could achieve.


      • Yes Oil has done great things, surely… but the bad things that it has done have had a larger impact long term in our country, meanwhile the good things have not been lasting. Think about it, infrastructure projects that were once built but are now crumbling. Perhaps you would say “its the leaders and how they use the oil, not the oil itself”. But it is the nature of oil that incentivizes the leaders to behave in such a way. So we live at the mercy of progress only when it a regime chooses to employ the wealth for it. Great. It’s unfortunate that you brush aside such an important aspect that shapes our politics. Every country’s present can be explained by its past and its social and political systems are directly affected by the economic system. Take for example the southern united states, the plantation economy defined it’s social and political structure, it explains its low rate of urbanization and its poverty. So this isn’t about latching on to oil as the culprit without basis. This is about understanding the foundations of our political system (colonialism also plays a part, ojo) in order to come up with real solutions to what plagues our institutions.Instead of talking about what the MUD did today or whether Maduro is inept or not. I am a big fan of your blog, have been for years, I really hope you guys take some time to explore this subject. In particular, the incentive structures that oil generates and the subsequent institutions that result from them.


    • Thanks, that was quite beautiful. (Except for the fence – why on Earth can’t we do something dignified for once?)


  3. “Nunca levantamos muchas salas de teatro en este país. ¿Para qué? La estructura principista del poder fue siempre nuestro mejor escenario. […]. ¿De dónde sacamos nuestras instituciones públicas? ¿De dónde sacamos nuestra noción de “Estado”? De un sombrero. De un rutinario truco de prestidigitación. […]. La aparición del petróleo como industria creó en Venezuela una especie de cosmogonía. El Estado adquirió rápidamente un matiz “providencial”. Pasó de un desarrollo lento, tan lento como todo lo que tiene que ver con agricultura, a un desarrollo “milagroso” y espectacular.[…] Un candidato que no nos prometa el paraíso es un suicida. ¿Por qué? Porque el Estado no tiene nada que ver con nuestra realidad. El Estado es un brujo magnánimo […] El petróleo es fantástico y por lo tanto induce a lo “fantasioso”. El anuncio de que éramos un país petrolero creó en Venezuela la ilusión de un milagro. Creó en la práctica la “cultura del milagro” […] La riqueza petrolera tuvo la fuerza de un mito […] Betancourt, Leoni y Caldera no fueron demasiado lejos en ese “sueño venezolano” porque la realidad presupuestaria lo impedía. Seguíamos siendo ricos, pero, no tan ricos. Pero vino el otro Pérez, Carlos Andrés Pérez, y allí sí encontramos la frase que nos definía. Estábamos construyendo la Gran Venezuela. Pérez no era un Presidente. Era un mago. Un mago capaz de dispararnos hacia una alucinación que dejaba pequeñas las fanfarronadas del perezjimenismo. […] El país no progresó, desde luego. El país engordó […] [El gobierno de] Perez Jimenez fue un debut: el de Carlos Andres Perez, una reprise”

    Que hubiese dicho Cabrujas del gobierno de Chavez.


    • Habría dicho lo mismo que dijo Mirtha Rivero en el segundo epílogo de su libro La Rebelión de los Náufragos: “¿De qué se quejan?”.

      Cabrujas, debido a toda la fanfarria que generaban sus obras teatrales, periodísticas y televisivas, además de su militancia en el partido MAS, se le tomaba como un notable al cual se debía prestar mucha atención, muy al estilo de Arturo Uslar Pietri. Sus juicios al gentilicio venezolano eran verídicos pero también feroces y furibundos. El ejemplo clásico es su definición de Venezuela: “un accidente de la historia”. También decía que el origen de sus críticas era el amor que sentía por el país. Sin embargo, Cabrujas nunca entendió que el semblante de sus críticas carecía de efecto; aunque desnudaran nuestros defectos, eran incapaces de generar una real motivación de base para tomar cartas en el asunto. Igual como ocurre en la psique del obeso, que nunca se sabe a ciencia cierta cuál evento le dará motivación para rebajar, pero es seguro que las críticas a su gordura dañarán su autoestima.


  4. I loved the post! And I agree, but I would say that Venezuela would have been better off without oil because our agricultural development would not have make of Venezuelans a prey and the country a target of evil powers.
    But also good people got around like Juan’s grandfather and many many others in look of hope and a new life.
    So thank you oil(=money) (“Zumbaque 1”) for all the good things you have bought us as a nation.


  5. I am working on an article about Venezuela’s petroleum curse/blessing. Its tentative title: “One Hundred Years of Oilitude.” What do you think?


  6. I afree mostly with JCG, mostly because of the way oil shapes our economy, culture and state-society relations. You should check out Fernando Coronil’s The Magical State, or El Estado Magico, available in Spanish with a superb introduction by Edgardo Lander on the continuities (despite ruptures) of Venezuela’s petro-state. Coronil’s idea of the magical state is inspired by Cabrujas.


    • Coronil books are well worth the read , believe he once recognized the debt to Cabrujas in one artIcle.


  7. 100 years ago we became a socialist country, as the state took ownership of oil. It’s that simple. We can be a mixed economy at best, but never a truly capitalist country as oil “es de todos”.

    This is an axiom in our culture.

    This is why I get so frustrated with the search for an “economic system” that could replace the current “socialism of the 21st century”. The fact we have oil forces us to be a socialist/mixed economy. Even the most radical forces within chavismo accept that there is a place for private entrepreneurs; they just need to be aligned with the government and not be a destabilizing force.

    Our political fight is really not an ideological one. It is basically a tribal one. There is a current tribe that has taken over the government lead by a very strong cacique/caudillo (the same thing) that has died but the tribe remains in power. In order to replace the current government the opposition needs to become a tribe.

    As long as we keep fighting internally this will never happen.

    That simple.


  8. Many people dont know that what gave the Venezuelan oil industry its biggest impulse was Gnral Lazaro Cardenas nationalization of the Oil Industry in Mexico which sent all the International Oil Industry packing to Venezuela boosting their investments here and really changing the industrys landscape . We ought to build a Statue to General Lazaro Cardenas for all the good times he brought us . Maybe in future now that the situation is reversed the Mexicans ought to build Chavez a statue . The Irony of History.!!


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