Archive for February, 2008

Rationing cards, another smart Chavista invention coming soon at a PDVAL market near you

February 21, 2008

And so it begins. After shortages arising from price controls and the Government’s inefficient intervention into the food distribution chain, the new PDVSA owned PDVAL markets will have what effectively represents the introduction of rationing cards in Venezuela.

One can only ask the obvious: Where or what next?

Asdrubal Chavez, Vice-President of PDVSA and the President’s cousin (of course), announced that in the planned network of large (PDVAL) and smaller markets (PDVALitos) run by the PDVSA subsidiary, they will keep a register of all purchases, limiting purchases to once a day. Moreover, they have done the studies of how much food a family may need and purchases will be limited to those amounts. They will have a “file card” (read rationing card) to register purchases so as to avoid repeats and people exceeding the limits.

There are 26 PDVALs and 20 PDVALitos, but the Government plans to have about 180 and 2,000 of each by the end of the year. The PDVAL network will be separate from the existing Mercal network.

You have to love the creativity of the revolution as they reinvent failed concepts and as they fail, improve on them to emphasize their failed aspects. Ayn Rand would have been so proud of them, as they fit her descriptions so well!

Santos sends soe very nice species to compete with Eduardo…

February 21, 2008

Santos sent me these very nice pictures of species

Two very nice Cattleya Lueddemanniana crosses, the one on the left has the “Haydee” plant in the cross. The one on right has very nice color.

Left: A first flowering of a C, Lueddemanniana coerulea. On the right Jumelea Sagitata

A nice Brassia Rex

Chavez throws temper tantrum over media criticism of his Government

February 21, 2008

President Hugo Chavez threw a huge temper tantrum today, showing that he is on the edge and frustrated over the failure of his Government, as there are daily protests, road blocks and in the latests turn, looting of Government owned markets, including one in the town of Sabaneta where Hugo Cahvez was born and where one of his brothers is the current Mayor.

Chavez’ tantrum took the form of one of his nationwide obligatory TV addresses which lasted for quite a while, at least one hour, and which he devoted to blasting the media for their coverage of the problems, claiming they were simply an exaggeration and accusing them of carrying out a media war against him and his Government.

What is most interesting is that most of the tantrum appeared to be due to this headline in Ultimas Noticias, a newspaper which is considered to be pro-Chavez and whose Editor, Eleazar Diaz Rangel, has vigorously sided with the Chavez Government on most issues:



Headline: Health care in coma due to the lack of funds
Sub title: Hospitals in Caracas in a functional coma according to Luisana Melo

Chavez said that it was not true that the country’s health system was in a coma and using his classic hyperbole, “if it were not for the revolution, people would be dying of hunger”. Chavez seems to not be informed of the state of the public health system and for the first time in the country’s recent history, there are chronic shortages of the most basic staples from milk, to bread, to coffee, to meat.

The article in pro-Chavez paper Ultimas Noticias on health care actually interviews the Secretary for Public Health of the Metropolitan Mayors office, who says: “The health care system in Caracas finds itself currently in a situation of functional collapse…this is a reality we have to assume…we continue to have unacceptable health indexes…there are no professional (doctors) as the number being educated has gone down…91% of the budget is spent on salaries, we don’t have money even to buy a stethoscope”

Another pro-Chavez paper, El Mundo, was heavily criticized, together with El Unversal, which is considered to be opposition.

The Vice-President of the Venezuelan Medical Federation said after the President’s speech that Chavez knew that the health care system collapse and it is in coma “because President Chavez was not properly advised” when it created a parallel health care system (Barrio Adentro) and the primary care system is indeed collapsed and Chavez should visit hospitals and see how the facilities are not working and the system is indeed in a “coma”.

Chavez also invited singer Alejandro Sanz and Fito Paez to come and do a duet with him, saying it was false that he had not allowed Sanz to sing in Venezuela. Paez said Chavez was a Dictator for this and said even when Pinochet was in power in Chile he was allowed to sing there. Of course, it was not Chavez, but his underlings, that canceled twice Sanz’s concerts or did not rent out the Poliedro to allow him to hold a concert of the size required to make it profitable. Sanz has been very critical of Chavez in his concerts.

Clearly, the Venezuelan President is extremely sensitive to the constant criticism and protests and keeps acting as if he had recently assumed the Presidency, while the population is simply fed up with shortages and inflation and the fact that the revolution has been in power for nine years and has yet to deliver much to the population.

Veniran tractor factory to shut down

February 21, 2008

And another one that surprises nobody:

“The company with Venezuelan and Iranian capital Veniran Tractor could be forced to closed down due to financial problems, according to charges by Deputy Juan Linares, a member of the Legislative Council of Bolivar State. The Board of Directors has disappeared for two months and the payroll system changed from bank accounts to handing over cash, explained Linares to newspaper Correo del Caroni. On top of that in January only four tractors were assembled and so far in February only maintenance activities have been performed. The regional Deputy says that the shutdowwn of the factory should be prevented because of its incidence on the economy of the region.”

I mean, Iranian manufacturing technology, sporadic Venezuelan Government financing, non-profit socialist system, ideal cultural affinity between partners, modern Iranian and Chavista management techniques, what could have possibly have failed in this project?

What was Hugo Chavez thinking when he said Fidel Castro was not clinging to power?

February 20, 2008

Things are such in the revolution, that I don’t need to write much about the things said or happening in Venezuela, like Chavez’ reaction to Fidel Castro’s resignation:

“this is a lesson to those that accuse men like Fidel of desperately clinging to power”

What was Chavez thinking about when he said that?

a) He wasn’t, he seldom does…
b) 41 more years!
c) I am clinging on…
d) “men like Fidel”=”Dictators, like us”
e) All of the above

The cynical revolution gave up all remnants of Sovereign rights when issuing the country’s and PDVSA’s bonds

February 19, 2008

You have all heard in the last ten days the cries in defense of sovereignty coming from the leaders of the revolution from top man Hugo Chavez, to Rafael Ramirez, to any bit size National Assembly Deputy trying to get his image on TV to get his or her opinions on the matter:

Treason! -Cried most of them.

Nobody was defending sovereignty in the IVth. Republic! – Cried all of them.

Let’s jail them for allowing foreign Courts to rule on contracts that should only have a Venezuelan jurisdiction – Cried some.

Nobody protects the Fatherland like the revolution! – Dared to say a few.

But as with so many other things in the revolution, they are simply following Maddona’s suggestion and simply striking a pose for the revolution, either cynically saying what they know is not true, or following the words of the “leaders” or simply speaking out of their customary ignorance.

The problem for the revolution is that it tries to blame the past for all of our problems, but the revolution is simply becoming the past. Nine years of incompetence, futility and inefficiency can no longer be hidden so easily. And if there is a fault in the way the Government has handled the ExxonMobil contract, the truth is that they have never, yes, never done anything to defend sovereignty in the way they claim and in the end, as I suggested two days ago, they are the true traitors, the ones that are leading Venezuela and PDVSA into oblivion through their stupidity and ignorance.

You see, a friend took the trouble of going through the Prospectuses of most of the Sovereign bonds issued by Chavez’ Government over the last few years, to understand how the revolution “protected” the country’s sovereignty and was kind enough to send me a compilation of the relevant sections of each of them.

What these documents show is that the revolution is as incapable and inefficient when it lies, as when it tries to solve the country’s problems.

Let’s take, for example, and in no particular order, the Global 25 bond issued by the Republic in April 2005 to the tune of US$ 1.6 billion and a coupon of 7.65%.

Right off the bat, the prospectus says:

ENFORCEMENT OF CIVIL LIABILITIES

“Venezuela is a foreign state. As a result, you may not be able to effect service of process within the United States against Venezuela or enforce against Venezuela judgments in the courts of the United States predicated on the civil liability provisions of the federal or state securities laws of the United States. Venezuela has agreed to submit to the jurisdiction of United States federal and New York state courts located in the Borough of Manhattan, New York, New York, the courts of England located in London and the courts of Venezuela located in Caracas, and has waived some immunities and defenses in actions that might be brought against Venezuela with respect to the bonds. Under Venezuelan law, neither Venezuela nor any of Venezuela’s property have any immunity from the jurisdiction of any court or from set-off or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution or otherwise), except that Venezuela, as well as Venezuela’s properties located in Venezuela, have immunity from set-off, attachment prior to judgment, attachment in aid of execution of judgment and execution of a judgment in actions and proceedings in Venezuela.”

Where I have placed in bold the most important part which indicates that not only can the Courts of the US express judgment against the country, but Venezuela has explicitly agreed to submit to the jurisdictions of not one, but two foreign Courts: those located in the Borough of Manhattan and those of London.

Recall this bond was issued less than two years ago and seven years into the “revolution” and under the Presidency of Hugo Chavez.

Later in the same Prospectus, we come up with the following description of what laws will govern the bonds:

Governing Law, Jurisdiction and Waiver of Immunity

“The Fiscal Agency Agreement and the bonds are governed by, and shall be construed in accordance with, the laws of the State of New York.

The Republic agrees that any suit, action or proceeding against it or its properties, assets or revenue with respect to the bonds (a “Related Proceeding”) shall be brought exclusively in the courts of England that sit in London; in the Supreme Court of the State of New York, County of New York; in the United States District Court for the Southern District of New York; or in the courts of the Republic that sit in Caracas, as the person bringing such Related Proceeding may elect in its sole discretion,…The Republic also agrees that any judgment obtained in any of the Specified Courts arising out of any Related Proceeding may be enforced or executed in any Specified Court … by means of a suit on the judgment or in any other manner provided by law. The Republic hereby irrevocably submits to the exclusive jurisdiction of each of the Specified Courts for the purpose of any Related Proceeding and, solely for the purpose of enforcing or executing any judgment referred to in the preceding sentence (a “Related Judgment”), of each Specified Court and each Other Court….

The Republic agrees that service of all writs, process and summonses in any Related Proceeding or any suit, action or proceeding to enforce or execute any Related Judgment brought against it in England may be made upon the officer in charge of the department of consular affairs at the Embassy of the Republic, presently located at One Cromwell Road, London SW7 2HW, England (the “London Process Agent”) and service of all writs, process and summonses in any Related Proceeding or any suit, action or proceeding to enforce or execute any Related Judgment brought against it in the State of New York may be made upon the Consul General of the Republic or, in his or her absence or incapacity, any official of the Consulate of the Republic, presently located at 7 East 51st Street, New York, New York 10022, U.S.A. (the “New York Process Agent” ….

The Republic irrevocably consents to and waives any objection which it may now or hereafter have to the laying of venue of any Related Proceeding brought in any of the Specified Courts …

.. the Republic irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction (including, without limitation, the Foreign Sovereign Immunities Act of 1976 of the United States) and consents generally for the purposes of the State Immunity Act of 1978 of the United Kingdom to the giving of any relief or the issue of any process in connection with any Related Proceeding or Related Judgment,…”

Here I have removed a lot of the legalese just emphasize the main two points:

1) The Republic (under Chavez and the revolution!) irrevocably submits to two foreign Courts and even establishes the procedures for summons and notifications (including addresses!)

2
) The Republic (under the revolution and Chavez!) irrevocably waives any immunity which as a sovereign State some countries may give it and even specifies that it waives its rights to relief and immunity that it may receive under specific laws of the United States and the United Kingdom.

Amazingly enough, you can find similar paragraphs in the bonds issued by the Bolivarian Republic of Venezuela, under Chavez, under the “revolution” for the bond maturing in 2010, 2011, 2013, 2014, 2015, 2018 and 2034, many of which were only issued as a way of absorbing the excess monetary liquidity injected into the Venezuelan economy by political purposes and in irresponsible fashion by the revolution and its incompetent leaders. I will not bore you with showing you bond after bond since the same terms are applied to all of them.

So much for the revolution’s defense of Sovereign rights, which they are complaining and demanding from those that preceded them.

But it is interesting, given that all of these issues have to do with oil and PDVSA and the fight between ExxonMobil and PDVSA, to look at what the prospectus for the PDVSA bonds issued less than a year ago by the Chavez Government said, given the recent accusations and charges against the leaders of PDVSA and Venezuela before Chavez came to power, in the case of ExxonMobil’s injunctions against PDVSA.

In late March 2007, PDVSA issued a Prospectus and it contains such jewels as:

Governing Law

“The Indenture will provide that the Notes will be governed by, and construed in accordance with, the laws of the State of New York.”

or
Consent to Jurisdiction and Service of Process; Sovereign Immunity


“The Issuer has consented to the non-exclusive jurisdiction of any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City, New York, United States, and any appellate court from any thereof, and has waived any immunity from the jurisdiction of such courts over any suit.”.

or

“the Issuer will waive such immunity and will agree not to assert, by way of motion, as a defense or otherwise, in any suit, action or proceeding the defense of sovereign immunity or any claim that it is not personally subject to the jurisdiction of the above-named courts by reason of sovereign immunity or otherwise, or that it is immune from any legal process…or from attachment either prior to judgment or in aid of execution by reason of sovereign immunity.”

This one is truly remarkable. First or all, it basically repeats the same Courts as those used for the Sovereign bonds and waiving from immunity that any Sovereign protection Venezuela may have (PDVSA is not Venezuela by the way). But what is truly most remarkable and cynical is that the same revolutionary Board of Directors that repurchased PDVSA’s bonds in 2004 at an outrageous premium, which had no financial justification other than to protect the Board members as individuals from US legislation under the Sarbanes-Oaxley Act, is capable of not only issuing bonds under foreign jurisdiction, but going as far as waiving any possible immunity that Venezuela may have as a Sovereign Nation under the laws of the countries where these jurisdictions are.

But then, these same people, these fake and paper revolutionaries, come on TV, accuse the Governments of the past of being traitors and giving up Sovereignty, when they have given up the remnants of Sovereign rights the country may have had, even waiving the Sovereign rights of Venezuela and what is worse, destroying and, using a word they seem to love, irrevocably mismanaging the country’s premier industry into oblivion.

This did not happen last Century, under Caldera and the IVth. Republic, this happened ten months ago, under Chavez and his so called revolution.

It is time for these cynical and incompetent liars to stop destroying what is left of PDVSA and Venezuela.

Help guide to understanding what is happening in revolutionary Venezuela

February 19, 2008

On Hoarding:

Samuel Ruh, President of the Consumer Protection Agency: “Anyone holding inventory of more than three days, is hoarding”

Ramon Carrizalez, Vice-President of Venezuela: “It is false that if inventories are more than 4 days it will be considered hoarding”

Plans for an oil boycott of the US:

Hugo Chavez #1, President of Venezuela: “I will stop sending oil to the US if Venezuelan assets are frozen”

Hugo Chavez #2
, President of Venezuela a week later: “We don’t have plans to stop sending oil to the US”

On the unanimous expulsion
of Deputy Tascon from Chavez’ party PSUV:

Jorge Rodriguez
, former Vice-President of Venezuela: “Deputy Luis Tascon was expelled from PSUV in a unanimous decision”

Carlos Escarra, Deputy of the National Assembly: “There is still no decision to expel Tascon from the party, what there was, was a proposal to expel him”

Iris Varela, Deputy of the National Assembly: “How can yo expel someone from a party that has yet to be formed?”

On hoarding by the Polar Group of companies:

Hugo Chavez (#1 or #2, you choose): The Polar Group of companies has been surprised hoarding a few times”

Polar Group of companies::”We have been the subject of 70 inspections in the last four months all over the country, and in each case we have demonstrated the normalcy of the operations of the company”

All very clear, no?

Who the true traitors in Venezuela really are

February 17, 2008

Over the last week there has been a cry for Venezuelans to outright reject ExxonMobil’s threats against the country and a call for Venezuelans to all rally around this issue over this “common” enemy. If you don’t, say those that are making this call, who are both in the Government and in the opposition, you are simply a traitor to your country.

Sorry, I just don’t buy, you can not make me rally behind the irresponsible behavior of the Venezuelan Government, any more than you will not find me in favor of war against Colombia over any incident caused by Hugo Chavez. This is simply false patriotism at its best. I know exactly who the traitors are and let me tell you it is not those who objectively analyze the situation and realize that it is a clash between a commercial entity (ExxonMobil) and Venezuela’s oil company who sought to take advantage of its position to force ExxonMobil to give up its property and the rights it had acquired via a contract.

ExxonMobil is no saint, they went into this project in good faith in partnership with the Venezuelan oil company and the reason they have bean able to obtain injunctions against PDVSA’s assets, is precisely because PDVSA and the Venezuelan Government decided to bypass valid contracts over and over until ExxonMobil decided it had enough and started fighting it. In a very real sense, this is no different than the expropriation of farms, companies such as Invepal taken over by the Chavez Government without any compensation and even the buyout of telecom company CANTV where the Chavez Government forced everyone to sell to it at a value below fair value. Everyone lost, because the Government had the upper hand, even the Venezuelans who invested in CANTV in good faith in the IPO.

A country will not function well until a contract signed between two parties is as solid as the paper it is signed on, respected not only by all that sign it, but also by the Courts. A society can not work if there is no rule of law. I expect contracts to be respected not only by my country, but also by the company I work for, or by my relatives. If they don’t respect them, I want nothing to do with them. It’s called principles, not treason, as many want to make it out to be.

Just to make sure, let’s review a little bit of the history of the Cerro Negro project, how it came about to be and how and why it was set up as it was and has led to the events of the recent weeks. If anyone finds a detail that is not correct, please let me know, I am relying on my own memory for the details:

In the 1990′s, the Orinoco Oil belt was long on promise but short on results. The price of oil was oscillating in the low to mid teens and it was difficult to make a profit improving oil from the Orinoco Oil belt unless one took the best of the best of the oil from the area, which was not the idea. (Oil from the area can vary widely from fairly light to almost shale)

PDVSA decided to partner with those that had the technology for improving heavy oils, which happened to be mostly the major oil companies of the world. It was then still a risky proposition, as the projects would only be profitable at the time at US$ 12 per barrel. There were basically two countries involved in this field: Canada and Venezuela. Canada, particularly the province of Alberta, offered very attractive conditions, still valid today, in which companies pay a royalty of 1% until the revenues of the project reach the initial investment at which time it would jump to 16.5%. Additionally, these companies pay income tax of 25% in Alberta.

To make the projects attractive, PDVSA then matched the 1% condition of Canada, even if it could not match the income tax rate, as Venezuela had a 33% rate on corporations which could not be changed. All companies required majority in the projects, mainly because it was their own technology that would be used and because they were going into unknown territory.

This was not enough. In order to do the projects, PDVSA and its partners had to get quite creative with the financing in order to make it asufficiently ttractive. In those projects in which the projects issued bonds (Cerro Negro and Petrozuata), the parent companies offered guarantees on the bonds, which expired on the day the project reached its production potential. Moreover, because the length of the bonds was so long, the bonds were issued in most cases as “sinking fund”, which means that the bonds not only pay interest, but at some point in time also begin paying back capital every six months. Thus, when the bond matures at the end (The bonds had maturities from 12 to 30 years) you don’t get a final payment of 100%, but only a small fraction, as most of the bond has paid back its capital already. This structure has the advantage that even if the price of oil had fallen, the price of the bonds would not be impacted as much as it did not pay all of the capital at the end, but in steps with the interest payments.

Thus, not only were the projects risky, but to make interest payments attractive to investor, capital had to be paid early. Only in this manner was it possible to find financing for the projects at a level that would make it profitable, even if oil prices stayed down in the mid teens. Moreover, the projects had to create an escrow account abroad which had to contain sufficient funds to cover the next interest payment, as an additional sweetener to make the project’s financing possible.

The Venezuelan Congress approved the projects and only Causa R, the predecessor of part of PPT voted against it, together why three or four additional Deputies.

The projects had yet to produce a single barrel of oil when Hugo Chavez reached power. In fact, Chavez as late as 2001 was offering some of the same oil companies that were partners, additional projects in partnership with PDVSA and under the same conditions as the original projects. It is in the newspapers when Chavez hailed the projects and told the President of France’s Total that he was willing to start new projects under the same conditions (1% royalty and 33% tax with PDVSA a minority).

Then in 2004, after the projects’ bonds were quite depressed in 2003, oil prices jumped up and that is when PDVSA started reviewing the projects as the PDVSA representatives saw the huge increase in profits of the projects. At that time, PDVSA, in violation of the original contract, unilaterally told the projects that the 1% royalty would be increased to 16.5% even if the project had yet to reach the level of revenues required for that increase. None of them had.

The companies partnering accepted it, because they could do very little about it. They could go to Court locally. but were likely to lose and gain the antipathy of the Government and it was not worth going to international arbitration if you planned to have future projects in Venezuela.

About six months later, the Government and PDVSA struck again. First, they created a new “extraction tax” of 16% which is nothing more than an additional royalty on the oil, but also increased income taxes on the projects from 33% to 50%. Once again, the companies did nothing to stir the boat, fearing that local Courts would not benefit them and going to arbitration would be bad for future business. But clearly, the original contractual conditions had been unilaterally breached by the Venezuelan Government, even if the projects remained very profitable.

But note that Venezuela’s future competitive position has been weakened by these changes. Canada’s conditions have yet to change, if a company were considering the two it would obviously choose Canada, unless you have no expertise, are given special conditions and have to put up little money as Chavez and PDVSA have been doing recently to State Oil companies with no experience in the field.

The final drop to these companies came in 2006 when the Government announced, once again unilaterally and changing the same rules of the game the Venezuelan Ambassador to the US claims to want
ExxonMobil to respect
, that the partners had a date to give up controls of the projects, selling to PDVSA enough of their stake so that PDVSA would have 60% of each project at a price specified by PDVSA. PDVSA even had a price: the book value per share of the project, an absurd concept more so in an atmosphere of increasing oil prices. Even worse, if any partner did not want to accept the change, it had to leave the country and PDVSA would buy all of its stake, at the same low price.

The thinking was that everyone would accept, it was still a good business after all. However, it did not happen. Total and Statoil asked out of their project and ExxonMobil and ConocoPhillips. also decided to leave the country. ConocoPhillips even wrote off the project as a loss, taking a big hit o its profits, while negotiating with PDVSA and then asking for arbitration in parallel with negotiations. ExxonMobil barely negotiated in the belief that PDVSA was not going to budge from its book value price and wanting to set an international precedent for the contracts it signs. It is after all a for profit institution.

Curiously, arbitration is guaranteed by a decree for the protection of investments issued by none other than…

Hugo Chavez in 1999…not the IVth. Republic… but that is a different story.

In any case, ExxonMobil went to arbitration, but the investors in the Cerro Negro project were left hanging. Under the terms of the original bonds, the expropriation of the partners, or change in partners became “default” events, but PDVSA was negotiating with the bond holders so as not to pay the steep premium required by the original conditions, but a smaller fee. In early December PDVSA agreed to pay about 30% of the original to bondholders and did so on December 27th. ExxonMobil waited until payment was made to introduce its injunctions all over the place. It did not want to hurt those that bought the bonds while ExxonMobil was running Cerro Negro. (No such an agreement has been reached for Petrozuata bondholders, which may be why ConocoPhillips has yet to be as aggressive)

Meanwhile, PDVSA has been selling parts of CITGO and not precisely at book value. I wonder what Ramirez and company would say if a US court valued CITGO at US$ 3 billion for the purposes of ExxonMobil’s injunction, that is precisely CITGO’s last published book value, but the company is probably worth around the US$ 12 billion asked by ExxonMobil.

And ExxonMobil did that, because of the mismanagement of PDVSA. If PDVSA’s cash flow was not as tight as it is, if the company did not need to borrow money abroad as much as it needs to and if the whole operation had not been mismanaged as badly as it has for the last few years, ExxonMobil’s injunction would be essentially meaningless. But ExxonMobil rather than wait three or four years for arbitration, want to negotiate a fair payment now. It is PDVSA that is weak, not ExxonMobil. And it is weak because of the mismanagement and treason, yes treason, of Hugo Chavez and Minister Ramirez who have run PDVSA as if it was their own political fiefdom and not for the benefit of all Venezuelans.

And while Ramirez and Chavez and today the former Attorney General, claim ExxonMobil’s injunction is exaggerated and should be overturned because PDVSA will pay whatever arbitration says, the truth is that everything that has been said and done in public points to exactly the opposite;

–Chavez #1 said last Sunday that he had ordered that Venezuela stop sending oil to the US if any of PDVSA’s assets were seized. This was pure bluff as some had already been seized. Of course, today Chavez #2 said that there is no plan to stop sending oil to the US, after Chavez #1 challenged the US to boycott Venezuela’s oil, which was simply mentioned in a Washington Post Editorial as something the US coudl do if it really wanted to ruin Hugo Chavez.

–Ramirez suggested that it would not pay what the arbitration Court said. he later denied it, saying he would pay but only up to book value, essentially ratifying what he had said earlier.

–The Venezuelan National Assembly passed a motion asking that Venezuela withdraw from the World Bank and thus withdrawing from CIADI, the World Bank’s body that is considering the arbitration between PDVSA and ExxonMobil and ConocoPhillips.

—Venezuela announced that it would stop selling oil to ExxonMobil, which was in reality a lot of hot air, since it clarified that it would erspect all contracts leaving a rather insignificant amount of exports that could easily be sold to a trader and then to ExxonMobil, maybe the decision irrelevant.

All of these announcements made by the highest authorities of Venezuela work in ExxonMobil’s favor, as they clearly point to an unwillingness of Venezuela to pay or abide by the ruling of the Courts of other countries or honor the contracts that it signed and even the country’s laws and Constitution.

So, who is the traitor here?

The ones that have damaged Venezuela’s reputation or the ones that understand that the rule of law is essential for modern and developed contract?

We are not the traitors, the traitors are:

-The ones that have destroyed PDVSA capabilities for political purposes
-The ones that given away our oil for essentially free to other countries, while people live in extreme poverty and malnourished in Venezuela
-The ones that lie about PDVSA’s production figures
-The ones that not only fired 20,000 PDVSA workers, but boycotted them from working anywhere in Venezuela, forcing them to go find work for the competition abroad.
-The ones that have not invested in PDVSA for the future
-The ones that have not invested in maintenance, ruining oil wells.
-The ones that destroyed over a million barrels of oil production.
-The ones that destroyed INTEVEP, Venezuela’s world class research center on oil for their own political purposes.
-The ones that have not signed a single mayor new project in nine years (Remember Cristbal Colon, later Mariscal Sucre?)
-The ones that allow corruption to be rampant in PDVSA
-The ones that give fields and form partnerships with countries with no expertise and no money in oil.
-The ones that use PDVSA money to fund political projects and candidates in other countries
-The ones that want PDVSA to be “roja, rojita”
-The ones that violate people’s rights
-The ones that send suitcases full of cash for their pet projects
-The ones that use PDVSA as part of Chavez’ political party
-The ones that allow foreigners to decide and determine PDVSA’s future
-The ones that wiped out Orimulsion
-The ones that use PDVSA planes for personal vacations
-The ones that let the Government use PDVSA to solve its problems
-The ones that buyback PDVSA’s debt at a premium to save themselves from US legislation
-The ones that have eliminated transparency in PDVSA’s numbers
-The ones that sell bonds for PDVSA and assign them in arbitrary fashion

There are many more, the point is, THEY are the traitors and one day they will have to pay for it.

I will never forget or forgive them, will you?

A morning in the life of shortages…

February 17, 2008

Went out this morning like every Sunday to get the papers and a few things needed at home:

–At the first bakery, there was coffee but no milk, had it black. Bought bread even if it’s not my favorite, you never know if that other one will have it later. There was no cheese and the owner said he could not sell me any flour, it’s in short supply.

–First supermarket. There is no flour, no Coca Cola, no milk. there are eggs, only one type of cheese, not my favorite.

–Second bakery has no bread, no flour, didn’t even ask about my “marroncito”

–Second supermarket has some Coca Cola, no milk, no cheese, no flour.

–Third supermarket had the cheese, still no flour. Time to go home.

Thanks God I get El Nacional at home, for some reason, maybe unrelated to shortages, you could not get it at the stands as they did not receive it, which also happened yesterday.

Of course, for the Government this is all virtual, invented by the media…

Venezuelan St. Valentine humor

February 15, 2008

Venezuelan’s keep their sense of humor as proven by this St. Valentine’s card circulating in the Internet. It says:

On top: The more traditional can opt for a jewel or a perfume. The more daring for an afternoon in an Arab bath, or dinner in an aphrodisiac restaurant.

…the truly in love will search for the impossible!!!

(sugar, flower, rice, oil, coffee, corn flour, milk, cold medicine and eggs)

P.S, The coca plant, gives comfort to those afflicted, lowers appetite, the sense of fatigue and tiredness.

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