Zumaque

One hundred years of oil

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…

PDVSA

PDVSA’s sad third place

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…

Oil Venezuela

The lost money in oil

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…

gulmarbig

Nothing is free

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…

pdvsa

Let’s wiki-audit PDVSA

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…

With this finger, I control your destiny

It’s Rafa’s world

Whomever you choose to support in the current debate raging among Venezuelan economists (suggesting, by the way, that we economists need to tone it down and get out more), there is one thing we can all agree on: Rafael Ramírez is firmly in control of economic policy. This doesn’t mean he’s in control of the…

The bit they don't show the tourists

The Petrocaribe Trap

A guest post by Alexis Caraballo, who makes her living as a Caribbean regional analyst. A failing economy, where everything for sale in the shops is imported, with dwindling foreign reserves and on the brink devaluation. Sound familiar? It does to folks in Jamaica, a country that breaks records not just in the 100-meter dash (9.58 seconds) but also in debt-to-GDP ratio (139%)…

international-energy-agency_0

The oil market vs. Maduro

Oil production outside of Venezuela continues to rise, and this poses a threat to the Revolution. This interview with International Energy Agency chief Maria van der Hoeven (from OilPrice.com) lays it out. The money quote: “…In our January 2014 Oil Market Report, we noted that with US crude oil production exceeding even the boldest of expectations…

Bachacos

Bachaqueo chronicles

Two items today on the smuggling of gasoline from Venezuela to Colombia – commonly known as bachaqueo. Both are in Spanish. This first-person account by Colombian journalist Sinar Alvarado is a must-read. Alvarado takes us to the back roads on both sides of the border to give us a real sense of the “business” and…

The object of one's addiction

Ban the poison

After an eleven-year course on currency exchange controls, it’s time to take our final exam boys and girls. The test has a single question: what have we learnt about currency exchange controls? Is it that … they are ineffective at stemming capital flight; they create huge distortions; they usually lead to an overvalued currency; they…

Putting the “dead” in deadweight loss

Subsidizing gasoline is such a multidimensionally bad idea, the study of all the different ways in which it’s counterproductive could take up the bulk of a very productive economist’s career. Over the years we’ve written about many of the angles: from air quality and congestion to the effects on urban development patterns, the state’s finances,…