The Orinoco projects were the most expensive to set up in Venezuela because they include industrial plants known as upgraders that convert sludgy oil into a product foreign refiners can process. Those cost $3.8 billion at PetroPiar. Chevron was investing about $700 million a year in the country even after Chávez’s nationalization, Moshiri said in 2014. It “built those upgraders in the middle of the jungle,” says Russ Dallen, managing partner at brokerage Caracas Capital Markets. “How do you explain walking away from that?”
This news may be bad for the future of Venezuela’s public finances, but it puts Chevron in a privileged position. Although many rivals may avoid Venezuela because of its difficult operating environment and low-quality crude, Chevron already has more than $1 billion worth of complex infrastructure in place to deal with both. “The ideal outcome is to still have the property when the regime ends,” says Dallen of Caracas Capital Markets. “I think their goal is to outlast Maduro.”
Os projetos do Orinoco foram os mais caros de se instalar na Venezuela, porque incluem plantas industriais conhecidas como upgraders que convertem o óleo de lama em um produto que as refinarias estrangeiras podem processar. Aqueles custam US $ 3,8 bilhões na PetroPiar. A Chevron estava investindo cerca de US $ 700 milhões por ano no país, mesmo após a nacionalização de Chávez, disse Moshiri em 2014. “Construiu esses revendedores no meio da selva”, diz Russ Dallen, sócio-gerente da corretora Caracas Capital Markets. “Como você explica se afastar disso?”
Esta notícia pode ser ruim para o futuro das finanças públicas da Venezuela, mas coloca a Chevron em uma posição privilegiada. Embora muitos rivais possam evitar a Venezuela por causa de seu ambiente operacional difícil e do petróleo de baixa qualidade, a Chevron já possui mais de US $ 1 bilhão em infraestrutura complexa para lidar com ambos. “O resultado ideal é ter a propriedade quando o regime acabar”, diz Dallen, da Caracas Capital Markets. “Eu acho que seu objetivo é superar Maduro.”
Our report discussing oil service company Weatherford, which entered bankruptcy protection with help from Venezuela’s unpaid bills, caught the attention of legendary investor Dennis Gartman who reads our reports and cited our work (and Russ “who knows more about the ins-and-outs of Venezuela’s capital markets than anyone we’ve come across ever”) in his daily Gartman Letter.
“If you help Cuba suck oil out of poor, starving Venezuela, you will be punished,” said Russ Dallen, a Miami-based partner at brokerage Caracas Capital Markets. “But if you promise to go and sin no more, you can get off the devastatingly powerful US sanctions list.”
“Si ayuda a Cuba a extraer petróleo de la pobre y hambrienta Venezuela, será castigado”, dijo Russ Dallen, de la empresa financiera Caracas Capital Markets, ubicada en Miami. “Pero si prometes ir y no pecar más, puedes salir de la devastadora y poderosa lista de sanciones de Estados Unidos”.
The main resource its industry lacks isn’t diluent but dollars. Longtime observer Russ Dallen of Caracas Capital says that international reserves have now dipped below $8 billion compared with over $42 billion a decade ago.
“Oil is a commodity and at the right price people will buy it. It’s like stolen property; there’s always going to be someone willing to make a buck,” said Russ Dallen, managing director of Caracas Capital, a Venezuela-based boutique investment bank, who closely tracks the oil industry.
Cut off from U.S. oil payments, Maduro has already begun to look for alternative markets, including India, the world’s second most populated country with 1.4 billion people and fast-growing fuel market which has a huge appetite for fuel as its population moves from bicycles to motorbikes and cars. “The Indians love Venezuelan oil,” said Dallen. “It’s very heavy, like tar, they can also turn it into asphalt and use it to make roads.”
The current head of PDVSA, General Manuel Quevedo is a career military officer with no oil industry experience. “Quevedo has done the work of our sanctions by himself because of his incompetence,” said Dallen. “They have killed the golden goose themselves,” he added.
“El petróleo es una mercancía y al precio adecuado la gente lo va a comprar. Es como las cosas robadas; siempre hay alguien dispuesto a hacer dinero”, dijo Russ Dallen, director gerente de Caracas Capital, un banco de inversión con sede en Venezuela que monitorea estrechamente la industria petrolera.
Al no poder recibir los pagos del petróleo que se le vende a Estados Unidos, Maduro ya comenzó a buscar mercados alternativos, como India, el segundo país más poblado del mundo con 1,400 millones de personas y un mercado de combustible en rápido crecimiento que tiene una gran sed de combustible conforme su población pasa de las bicicletas a las motos y los automóviles.
“Los indios aman el petróleo venezolano”, dijo Dallen. “Es muy pesado, como el alquitrán, pueden convertirlo en asfalto y usarlo para hacer carreteras”.
El actual director de PDVSA, el general Manuel Quevedo, es un oficial militar de carrera sin experiencia en la industria petrolera. “Quevedo ha hecho el trabajo de nuestras sanciones por sí solo debido a su incompetencia”, dijo Dallen. “Ellos mismos han matado la gallina de los huevos de oro”, agregó.
“They are desperate,” says Russ Dallen, an expert on Venezuelan oil and finances who heads the investment firm Caracas Capital in Miami. “Their cash flow from oil is severely disrupted by the loss of the U.S. market. This week, for example, there are no ships offloading any oil from Venezuela for the first time ever.”
Dallen points out that the U.S. and other countries are trying to block Venezuela from cashing in its gold. Britain is withholding more than $1 billion in Venezuelan gold stashed there.
But Dallen says Maduro will still be able to find countries like Russia, as well as global investment firms, to take the gold off his hands.
“It’s gold,” says Dallen. “There are always people willing to buy gold. That’s why pawn shops do so well.”
That is, Dallen adds, until the gold runs out. Then Maduro stands a bigger chance of being overthrown by opposition leader Juan Guaidó – whom the U.S. and some 50 other countries now recognize as Venezuela’s legitimate president.
Although China and Russia are still receiving Venezuelan oil, those sales generate no income, said Russ Dallen of investment bank Caracas Capital Markets, because they were prepaid with loans that Maduro long ago spent.
Current shipments to China, Dallen said, total 300,000 to 400,000 barrels a day, with 200,000 to 300,000 more going to Russia as its portion of a joint venture. An additional 400,000 barrels a day theoretically goes to India — where Russia owns one of two refineries that handle heavy Venezuelan crude — although Venezuela lacks the ultra-large tanker ships to make up for the long-distance transport costs.
Chevron, which also operates a joint venture with PDVSA, still imports Venezuelan crude under a provision in the sanctions that gave it a six-month grace period.