sábado, 8 de junio de 2019

OPPORTUNITY ONLY KNOCS ONCE...... for the oil scramble


Opportunity only knocks once...

for the oil scramble


Carlos Mendoza Pottellá - May 28, 2019

In previous works I have exposed the oil tragedy that the Nation is living, a result, in part, of the terrible planning of “pregnant birds” around the Orinoco Belt and the supposed "greatest oil reserves of the world", the technical disability, especially political-economic, management increasingly less professional and the overwhelming corruption, factors whose perverse effects are accentuated in a hostile geopolitical environment, blockade and sanctions exercised by the most powerful world power. [1]

The following graph, which I have reproduced in previous works, and in which the path of 103 years of oil production is recorded, confirms the seriousness of the aforementioned circumstances.



If attention is focused on the last two decades, the following can be observed:
The oil production, recovered from the 2002-2003 sabotage, when it sank at specific levels of up to 300 thousand barrels per day and an average for all of 2003 of 2.8 mbd, rose by 469 thousand bd to reach, in 2005, the 3 million 269 barrels per day in the annual average.

From that year-precisely the one during which the new expansion plans were formulated up to 5 million barrels per day, heirs of the failed and open expansive plans of 1994-1998-the average production began to fall, until landing at 2 million 894 thousand bd in 2013. That is, a decrease of 375 thousand barrels per day in eight years.

In spite of everything, and as I have mentioned in the works cited, in the following years, from 2012 to 2016 the PDVSA planners continued to present projects with goals dissociated from reality, from 5, 6 and even 7 million barrels per day by 2021 , supported by budgets impossible to finance, at any price predictable then for the oil barrel.

In the 2015-2019 investment budget, $ 234,357 million were programmed in 5 years, only for exploration and production, and a total investment of 302,316 million.

And much less feasible were those disbursements for an industry with financial results such as the following:



On the contrary, and as can be observed in the first mentioned graph, production fell to 1 million 911 thousand barrels per day in 2017, five million barrels per day less than the goal that was intended to be reached two years later.

From then on, and with the downward trend exacerbated by the application of the policies established in the "America First Energy Plan" of Donald Trump against the "outlaw states" of Iran, Russia and Venezuela, the collapse precipitated up to 800 thousand barrels newspapers registered in April of this year, after the sanctions provided in that plan became effective.

In spite of everything, in a year of planning default, and as recorded in the same chart, at the end of 2018 PDVSA's new goal was published: to produce 5 million barrels per day in 2025. Do you need comments?

This reiterated diagnosis has always been animated by the will to find ways of solution, means for the preservation of the main national mining patrimony. Of this I leave testimony in the references of this note. [2]

But the evidence of the current tragic circumstances has stimulated a new proliferation of proposals and perverse solutions, loaded with the ancestral privatist will: that which promotes the dispossession of the collective patrimony for the benefit of the most qualified sectors to obtain great benefits of the free market.

Regarding the sustenance and seniority of this debate and my arguments in this regard, I am forced to insert other personal references that I consider pertinent:

"... today it is fashionable to stop being rentiers and to stimulate productive scenarios where the private sector leads the baton, as in any capitalist society that prides itself on being so. Overcoming the obstructions generated by the state property over the oil resource, the real collective interest, in this sector, would be in the multiplying effects that private businesses would have in the reactivation of the supply and aggregate demand of goods and services, which, in turn, they will stimulate the growth of production and employment in the rest of the national economy. " [3]

"Many compatriots have been touched by the opinion matrix according to which, the privatization of Petróleos de Venezuela, S.A. PDVSA) can be the cure of all our economic evils. We will pay the external debt and we will continue expanding our oil production. The development of non-oil activities will come later. The serious circumstances in which the immense majority of Venezuelans live, located between chronic poverty and extreme poverty, make the privatization route urgent. Nationalist positions in this area are equated to attitudes of the miser, who dies of indigence in a bed of golden morocotas. " [4]

The main instrument of these proposals is based on a distorted interpretation of our history and an intentional confusion of concepts such as State, Nation, government, republic, collective heritage and citizenship, from which a fallacious discourse is devised, according to which Citizens, true owners of oil resources, are dispossessed by the State when it "appropriates" the benefits -the rent- generated by the industry that converts these minerals into products for the market.

"Exactly, the confusion between the terms government, State and Nation, are part of the discursive arsenal of those who postulate the primacy of private property over public property, privatization as synonymous with liberal democratization. When they condemn the "statist" policies that maximize what the government "intends to take", they obviate the fact that that government and that State are temporary entities that represent the rights of the eternal Nation, that is, the concept that encompasses all Venezuelans, alive and unborn, whose heritage must be managed with criteria of maximum present and future use. " [5]

A sample of that manipulative discourse was delivered to us more than three decades ago by a prominent epigone of the kindness of American liberalism, ashamed of our "absolutist" legal tradition and distorting, incidentally, the Bolivarian spirit that was expressed in its 1829 decree, which reserves the mines of any kind to the Republic and has been the foundation of the Venezuelan mining right until our days:

... our republican history shows the transition from the sovereign-king to the sovereign-civilian, be it the dictator-despot before or the dictator-political parties now.
Influenced by the Marxist-Leninist and fascist doctrines, equally absolutist, many of our thinkers turned away from the liberal ideas of Bolivar and Sucre, taking the notion that sovereignty rests in the State or the people as a whole ...

... the United States flourished because, in truth, they gave sovereignty to the individual

... They did not reserve to the State any material good (except for some natural parks), or industrial, commercial or service activities. Each one would produce primarily for himself and his family, and subsidiary for the community. Great distinction with absolutism! For in this work belongs first to the sovereign-king, to the sovereign-State or to the sovereign-people and only later to the worker and his family. [6]

From that fallacy has been promoted, and is still proposed today, the most demagogic and anti-national proposals: distribute annually a substantial part of the profits and all the dividends of the oil industry among citizens, that is, the largest of 18 years old. [7]

Antinational, unambiguously, because it is a proposal that strips the eternal Nation, that is, all living and unborn people in this country until the moment it disappears as such entity, for causes such as foreign conquest or nuclear cataclysm.

The inhabitants of Venezuela over 18 years, estimated at 20 million at the end of this year, constitute 60% of the total population, estimated at 32 million people for the same date.

At the time of such distribution of dividends, the portion thus privatized would be devoted largely to fuel the consumer market and the realization of investments that will burn in the great fires of the processes of centralization and concentration of capital characteristic of any free market, but even more when it comes to hungry people stimulated as the Pavlov’s dog towards the immediate consumption, in which spreads the massive propaganda of purchases by Amazon and investments "from only 500 thousand dollars" to obtain the Visa EB-5 of business in the United States.

Consequently, over time, the participation directly received by the majority of those twenty million "privileged" will be concentrated in the hands of entrepreneurs and another large part of them will be added to more than 10 million of the " minors "who will automatically be disinherited from their heritage. Given the current population growth rates, by the year 2050 another 8 or 9 million new disinherited will have been born in this country.

Beyond, we can not venture anything, especially if the forecasts on the change of the energy matrix are met in terms of the decrease in the use of hydrocarbons in the next three decades, which would lead to the facilities to extract oil in the following 600 years to become the dreaded "stranded assets" that today terrify the shareholders of Exxon Mobil and its corporate oil sisters.

The fallacy of these proposals is immeasurable, when it is intended to compare an annual dividend distribution fund with other transgenerational savings funds, such as Norwegian or Kuwaiti, which are precisely designed for "the new generations" and to postpone the consumption of income. extraordinary, which otherwise would cause perverse effects in their respective economies, such as those that gave rise to the so-called "Venezuela effect" (just as well characterized by the Norwegians and predicted in 1930 by Alberto Adriani) or the most recent, and popular among our novelists economists unfamiliar with the national economic history, "Dutch disease".

And it is about privatizing, not "de-statistizing", because it is about making private what is a public good, which must have a destination of collective benefit, of public service, of investment to increase the patrimony of all, of the Nation everything.

The media manipulation of these concepts, makes even the person hesitate before using the word "public", because it can be interpreted as "belonging to the State".

This manipulation led to extremes such as those of a well-known oil manager of the 70s, Shell-Maraven, when he proclaimed: "If I am a shareholder of Shell, why can not I be one of PDVSA?"
And that, precisely, was one of the first proponents of the distribution of shares of PDVSA among those over 18 years, always founded on the same argument:

"- By not resolving the differences between the State and the nation, it will leave the State the property of the oil fields when these should be the property of the nation. That is, of all of us. The State is its regulator, but not its owner. " [8]

Already by then, I was immersed in the debate of the "oil opening", and responded:

The opening is just the contemporary chapter of a policy that has always had the same sign: the expropriation of the collective heritage for the benefit of transnational big capital and the creole exploiting elites, whose spearhead is today, and for 20 years, the managerial domes of privatization mentality entrenched in the command posts of the state company. [9]

Over the years, now faced with the critical situation referred to in the first lines, the neoliberal matrix is ​​now reborn, now institutionalized in centers that promote this doctrine, such as CEDICE:

 "It is necessary to review the relationship between the State and Society with respect to the income produced by hydrocarbon activity, so that it goes directly to citizens. The economic surplus that originates in the oil activity, which corresponds to the Nation, will be entirely destined to the creation of a FUND, which will be the Savings, Patrimony and Investment Fund of the Venezuelans. Your performance will be delivered directly to each Venezuelan through individual accounts.
...
It will be necessary for PDVSA to stop being an operator and turn it into an excellent administrator of the Production Sharing Agreements, on behalf of the owners of the resource, all citizens. " [10]

Right now, at critical moments for the Nation and starting from this matrix CEDICE, we reached the future, and appears a new privatization proposal, wrapped in the attractive gift role of "democratize the oil income".

The decoys, are the same as always: Maximize oil and gas production, diversify the economy, sustainable development and environmental balance.  The best of all possible worlds. [11]
Starting from an affirmation that can be generalized to all the governments that have been in this country, according to which the groups that control the political power privatize the profits of the oil industry by appropriating them and that the rest of the Venezuelans always assume the losses, they propose a "new distributive scheme" on which they base their "oil democratization" project:

"We propose that part of the oil income be deposited in individual accounts of each Venezuelan adult without distinction of any kind and for this we propose to account clearly and separately the part of the oil revenue that corresponds to the State and that which corresponds directly to them to the citizens ..." [12]

Although it is a much more elaborate proposal than those of its predecessors, regarding the restriction of the destiny that each citizen will give to his portion of the oil income, when establishing that it will be applied to the saving of a pension, the financing of education , the acquisition of housing, hospital medical care and productive investment, the mere mention of these items prefigures a future in which health, education, social security and even retirement pension will be matters of which each individual should be provided, reducing the role of the State to the police, administrator of justice, guard of the borders and monopolist of the limited arms of the Republic. The ideal of liberal extremism.

Everything else can and will be privatized: schools, universities, hospitals, airports, parks, highways, pension funds, issuance of coins, jails and asylums. And all this for the benefit of its most capable citizens, entrepreneurs and survivors of the vortex of free competition.

The theoretical and ideological justification of the very recent López-Baquero proposal is the same and old one of Quiroz Corradi-Monaldi, Sosa Pietri, Giusti, Espinaza and others: It is the citizens, those with the right to vote according to civil codes, those over 18 years, the real owners of land rent and not the State. That is to say, we will reiterate until we are tired, not the Nation.

Depart as already referred, from the confusion of the State with the Nation and the reduction of this to its citizen portion, over 18 years:

"... we propose that the oil income generated by the sale of oil be divided between the State and the citizens. ...

The inheritance and the current framework define that the ownership of oil belongs to Venezuelans; however, this property must be extracted and sold to distribute it. Property acquires value beyond the legal formalism that belongs to all of us. It is for this reason that we consider that it is the oil income and not the deposits in the subsoil that we must distribute. [13]

From these postulates defines the portions that will make up the "Citizen Petroleum Income" and that must be deposited annually in the individual accounts of each citizen, in a "Patrimonial Fund of the Venezuelans":

… All the royalty, the surcharge of 16% of Income Tax applied to hydrocarbons and all dividends declared by PDVSA.

That is to say, all the rentistic surplus, the oil rent, rent of the land, which is perceived by the ownership of the subsoil, of its mines of any kind, including "bitumen and juices of the earth", which "corresponds to the Republic" from the Decree of the President of Colombia in 1829, it will be assigned to 60% of the current living population.

Of course, this Patrimonial Fund "will manage an important amount of resources that can be based on strict criteria of efficiency and transparency, guarantee a safe and reasonable return on the investments of these funds ..."

In other words, instead of being the republican State, legally, constitutionally and historically constituted as guarantor of the permanent interests of the Nation, it will be the entrepreneurs-administrators of a partial Fund, that of citizens older than 18 years, who will decide the fate of the ancestral and future collective heritage of all Venezuelans.

And none of this has to do with the funds created in other latitudes - Norway, Kuwait - to which is falsely referred to as alleged paradigms for the establishment of a privatizing contraband.
The bloody irony of the authors of this proposal expropriating the future inhabitants of the country is in its dedication:

"We dedicate this book to the new Venezuelan generations" [14]
May, 2019

[2] Petróleo y Geopolítica, en  Nacionalismo Petrolero Venezolano en Cuatro Décadas, pág. 628.  

Venezuela: Potencia o botín
,

Política petrolera a la manera de los músicos del “Titanic”,
 

Citgo, la Internacionalización revisitada,

[3] C. Mendoza P. “Privatizar PDVSA ¿vender el sofá”? en  Crítica petrolera contemporánea,  Crónicas Disidentes Sobre la Apertura y el Poder  Petrolero (1996-1999)
Publicaciones FACES-UCV, Caracas, 2000.

[4] C. Mendoza P. “¿La privatización petrolera hará el milagro?” ABC Petrolero, FUNDAPATRIA, 22 de julio 1998. 
[5] C. Mendoza PIgnorancia Petrolera y Neocolonialismo, en  Crítica petrolera contemporánea.  Op. Cit.

[6] Andrés Sosa Pietri "Apertura petrolera, soberanía y la parábola de los talentos". El Universal, pág. 2-2/ 6 de enero de 1996.

[7]  A precedent of transparent electoral demagoguery was the promotion, made in 2006 by the presidential candidate Manuel Rosales, of a card, "Mi Negra", where each citizen would receive a share in the profits of the oil industry as a contribution to the initial payment of his home.
[8] Alberto Quirós Corradi, “XX Aniversario, PDVSA en la encrucijada”. El Universal,  14 de septiembre de 1995. Pág. 2-2.  

[9] C. Mendoza Pottellá, 1996. “Apertura petrolera: Nombre de estreno para un viejo proyecto antinacional”. Inserto en varios capítulos de  Nacionalismo Petrolero en Cuatro Décadas.  Op. Cit.
[10] Diego González Cruz.  Propuestas para Venezuela. Cómo rescatar a la industria petrolera nacional. CEDICE Libertad, Caracas 2016

[11] Leopoldo López, Gustavo Baquero: Venezuela Energética. Propuesta para el bienestar y el progreso de los venezolanos.  pág. 166.
[12] López-Baquero, Op. Cit.
[13] López-Baquero Op. Cit. Págs..256-262.

[14] López-Baquero Op. Cit. Pag. 11.