Yesterday, French economist Jean Tirole won the Nobel Prize in Economics for his work in understanding imperfect markets such as monopolies or oligopolies. Personally, Tirole has been a huge influence in how I view the world. His graduate-level textbook on Industrial Organization remains, to me, the standard in the field, even though it is getting…
I’m not sure what the calculations were to get at this number, but the figure is significantly lower than Monaldi’s estimate of $200 as a breakeven price. Regardless, we’re far from where we would like to be.
That’s what Bloomberg’s Nathan Crooks is reporting. Exxon was suing Venezuela for compensation stemming from Hugo Chávez’s forced nationalization of its assets. We’ll see how the market interprets this ruling.
I concur with Setty: this talk by experts Daniel Kerner of Eurasia Group, Chevron’s Ali Moshiri, and our friend Francisco Monaldi of Harvard is well worth your time. It talks about the politics and the geology of oil in Argentina and Venezuela. The key part is Francisco’s estimate that the revolution needs the price of a…
An obscure document was published yesterday by Venezuela’s Central Bank (BCV), allowing PDVSA to sell the dollars it makes via oil exports to the BCV for deposit into an undeclared, secret fund at a more comfortable rate. Up until now, the rate that PDVSA got for its hard-earned dollars was the cheapest of the four…
Reuters is reporting that PDVSA wants to sell Citgo for $10 billion dollars – the equivalent of 8 months’ worth of the cost of the gasoline subsidy. “Investment bank Lazard Ltd (LAZ.N), which is running the sale process for Citgo on behalf of PDVSA, has sent offering materials to potential buyers, the people said, asking not to…
I had to do a double-take upon learning that PDVSA had hired Bell Pottinger, the PR firm run by Margaret Thatcher’s former communications director to “clean its image.” Of course, no comment from the revolution, so we have no idea how much they (we) are paying for this, nor for what purpose exactly. The part that stood out from…
Our friend Marianna Párraga of Reuters published a major scoop yesterday: Venezuela is exploring the idea of importing crude oil for the first time in its history. Read it here. Now, I’m no oil expert, but a few questions pop into my head: The story makes for interesting headlines, but as we evolve from a light-crude producer…
Whoops. The gas subsidy still sucks, but this post was wrong. Explanation below. Venezuelans have a hard time understanding the crazed extremes of mindless waste generated by our legendary gasoline subsidies. It’s not surprising: the policy is so multidimensionally insane, it’s hard to really take in all the different layers of destructiveness in one go.…
Yesterday 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…
Every year, AméricaEconomía releases a ranking of the 500 largest companies from Latin America. This year, 5 of the 10 biggest companies in the region are part of the oil/natural gas industry. The semi-public Brazilian multinational energy company, PETROBRAS, came at number 1. And the Mexican state-owned petroleum company, PEMEX, came at number 2. Venezuela’s…
Ramón Espinasa, former chief economist of PDVSA and currently a professor at Georgetown, published an outline of the oil industry fifteen years after Chávez was elected (here, in Spanish). I thought it contained interesting tidbits. For example: In 1998, each PDVSA employee was responsible for producing 83 barrels of oil per day on average. Today, it…
On July 3rd, our Twitter TLs were filled with the rumor that Rafael Ramírez would leave PDVSA to occupy the Executive Vice-Presidency of Venezuela. On July 8th, President Maduro said that Ramírez would stay in the cabinet “because he is the leader of the economic cabinet, the economic team, and the goal is to destroy…
Our pal Setty has a thoroughly researched, hugely important story on a little footnote in the PDVSA financials. It turns out that, long ago, PDVSA seized some ships from one of its partners, and yadda yadda yadda, Venezuelans lost $644 million. In minute detail, Setty goes through the job of untangling this particular ball of yarn. The…
Setty just posted a first-glance analysis of PDVSA’s audited financial statements for 2013. How about all you accountants, economists, and number geeks out there wiki the thing? Let’s see just how “pragmatic” Mr. Ramirez really is. If you have time, go through the thing and highlight the relevant aspects. Here’s hoping it makes for an interesting…
Caracas Chronicles 