Archive for September 25th, 2007

OPEC says Emperor has no clothes, cuts Venezuela’s oil production quota by 753,000 barrels

September 25, 2007

Last week, OPEC quietly decided to formalize what everyone but a few fanatics know and as part of its 500,000 barrel a day increase in production, it actually decreased
Venezuela’s OPEC quota from 3.223 million barrels of oil a day to 2.470
million barrels of oil a day. There was no announcement related to
decision, it was simply slipped into the update of the quota tables ( you can see it here,
go to the Nov 07 column in page 2). Clearly this was a high level
decision at OPEC, which has been reporting similar levels of production
for the country in its monthly oil report and as a serious organization wanted to have consistent numbers..

The
decision confirms what analysts, OPEC and the IEA have been saying for
the last two years, while the irresponsible Venezuelan administration,
including Minister of Energy and Oil Rafael Ramirez and President Hugo
Chavez have been telling the country. This simply show the utter
contempt these people have towards the citizens of the country and how
far they are capable of extending their lies and deceit in the name of
their fraudulent political project.

The cynical Venezuelan Oil Minister immediately took issue
with OPEC’s decision saying from Houston that “there was confusion and
manipulation in this decision…because Venezuela’s quota is set at
11.5%” and requires a resolution by OPEC Ministers to be changed and
this has not happened. First time I hear that Venezuela’s quota is a
percentage and not a number of barrels per day. its Venezuelan production figures, even denying the claims that Venezuela has tried to resolve the situation. \u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>The decision leaves Chavez the Emperor quite naked, as it can’t blame some obscure international plot to depose him for a decision that simply formalizes what is the reality: The country’s production has tumbled since 2003 and no evidence exists that the country is producing the levels claimed by the Venezuelan Government. Moreover, Government officials have been lying through their teeth about the true situation, together with their paid international cheerleaders.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>As I reported recently, PDVSA’s most recent numbers presented the data in a different manner and showed some new inconsistencies with earlier data. Clearly, the most bothersome aspect of all this is that transparency has been lost in reporting the country’s numbers. This is the reason why, despite oil prices near all time highs, Venezuela’s debt is 25-30% below the highs attained in March of this year. This makes Venezuela less attractive to foreign investors which will require higher yields to invest in the country\u003c/div\>\u003cdiv\> \u003c/div\>\u003c/div\>”,0]
);
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//–>IEA has long defended its Venezuelan production figures, even denying the claims that Venezuela has tried to resolve the situation.

The
decision leaves Chavez the Emperor quite naked, as it can’t blame some
obscure international plot to depose him for a decision that simply
formalizes what is the reality: The country’s production has tumbled
since 2003 and no evidence exists that the country is producing the
levels claimed by the Venezuelan Government. Moreover, Government
officials have been lying through their teeth about the true situation,
together with their paid international cheerleaders.

As
I reported recently, PDVSA’s most recent numbers presented the data in
a different manner and showed some new inconsistencies with earlier
data. Clearly, the most bothersome aspect of all this is that
transparency has been lost in reporting the country’s numbers from PDVSA, to the Ministry of Finance to the Central Bank. This is
the reason why, despite oil prices near all time highs, Venezuela’s
debt is 25-30% below the highs attained in March of this year. This
makes Venezuela less attractive to foreign investors which will require
higher yields to invest in the country.

Venezuela is a founding member of OPEC.

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