TALK IN CATO INSTITUTE/ MI CHARLA EN CATO

                   THE VENEZUELAN OIL NATIONALIZATION 

                                 WAS A BAD DECISION

WHAT WE “NATIONALIZED” WERE THE RISKS,  WE                               ALREADY HAD MOST OF THE BENEFITS

•       1970 LIBYA OBTAINED OIL PRICE INCREASE FROM OCCIDENTAL

•       1971  VENEZUELA INCREASED CONTROL OF OPERATIONS

•       1973 OIL AND POLITICAL CRISIS IN THE MIDDLE EAST PROMOTED VENEZUELAN NATIONALISM

•       1975 NATIONALIZATION WAS DECREED

 

           FOR ALMOST A DECADE PDVSA DID VERY WELL

•       DECISION TO NATIONALIZE WAS POLITICAL

•       MANAGEMENT STAYED IN HANDS OF PROFESSIONAL MANAGERS

•       EACH NEW GOVERNMENT INCREASED  POLITICAL                                                                 INTERFERENCE 

•       BY 1998 PDVSA  HAD LOST MUCH EFFICIENCY

  IN 1999 CHAVEZ OBTAINED POLITICAL COUNTRY OF THE   

                                        COUNTRY

                                FROM 1999 TO 2017

•       PRODUCTION CAME DOWN FROM 3.2 TO 1.9 MMBD.

•       EMPLOYEES INCREASED FROM 35000 TO 160000. MORE QUANTITY, LESS QUALITY

•       COMPANY DEBT INCREASED FROM $4 BILLION TO ABOUT $90 BILLION

•       EXPORTS TO U.S. DECREASED FROM 1.9 MMBD TO 0.6 MMBD

•       ABOUT 400,000 BARRELS PER DAY WERE GIVEN AWAY TO “FRIENDLY” COUNTRIES, ESPECIALLY CUBA AND THE CARIBBEAN MERCENARIES FROM PRTROCARIBE

                           WHY DID THIS HAPPEN?

•       MISSION WAS CHANGED, FROM OIL AND GAS COMPANY TO “SOCIAL” COMPANY

•       OIL WAS USED AS A POLITICAL TOOL, ABOUT 600.000 BD WAS GIVEN AWAY OR PAID FOR LOANS

•       SUICIDAL DOMESTIC SUBSIDIES

•       CHANGE IN RULES OF ASSOCIATION WITH FOREIGN COMPANIES

                       AND......HYPER-CORRUPTION

                       MAIN CORRUPTION CENTERS

•       PETROLEOS DE VENEZUELA

•       ARMED FORCES INVOLVED IN DRUG TRAFFICKING, IN CONTRABAND AND FOOD DISTRIBUTION

•       MINISTRY OF FINANCE AND FRIENDLY BANKERS

•       HANDOUTS TO FOREIGN POLITICAL ALLIES

PDVSA, HUMPTY DUMPTY, FELL DOWN AND BROKE INTO THOUSANDS OF PIECES. PDVSA CANNOT BE PUT BACK TOGETHER. A NEW MODEL OF OIL INDUSTRY MANAGEMENT WILL HAVE TO BE CREATED AFTER THE NARCO-REGIME IS OUSTED FROM POWER.