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Page added on August 4, 2017

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The Battle for Power in Venezuela

 

Bloomberg’s Vivianne Rodrigues discusses the turmoil in Venezuela with Bloomberg’s David Gura on “Bloomberg Markets.”



9 Comments on "The Battle for Power in Venezuela"

  1. bobinget on Fri, 4th Aug 2017 9:02 am 

    Just follow the money.
    Venezuela owes 140 Billion USD. Venezuela, home 18% of the world’s heavy crude has UNDER 10 billion in foreign reserves, (dependent on gold price).

    China and Russian loans (to Venezuela) are structured so as to receive crude oil in repayment. Not USD. Since the beginning of 2017, China was to take 250,000 B p/d as service to their loan portion.

    My position since January. China fully intends to
    force repayment (in crude). Only China has the
    motive and ability to flood Venezuelan markets with Chinese made consumer goods, medicines, food stuffs. Only China has the ability to extend credits, repayable in Crude, priced in yuan…….
    (who controls oil, controls world currency)

    Russian oil techies, workers paid by Russia are busy attempting to bring back Venezuelan oil production.

    Therefore, China and Russia are positioning themselves to dictate world crude distribution, pricing. Venezuela, w/18% is the latest addition.

    Bottom line: China has been permitting Venezuela to sell oil to the US at a loss to raise hard currency.
    That policy may end this week. When it suits China,
    China will no longer permit US exports to the US at prices below $145 per break-even barrel.

  2. bobinget on Fri, 4th Aug 2017 9:20 am 

    India is quickly moving towards almost total economic collapse. Before they do however,
    India will soon surpass China as the world’s biggest oil importer and population. IOW’s India is already dependent on Chinese imports. India did in fact just order one million barrels of US crude, a first.

    It’s being bandied about on Twitter that India and China can now offer starvation oil prices to Venezuela, benefitting from chaos.
    That, friends, is the level of geopolitical, financial, understanding in the world of oil.

    Investors are getting shy of money losing shale.
    However, shale will soon be a great ST investment.
    Why?
    Cause Venezuelan exports are going to China and India, not USA.

    How long will the next oil shale boomlet last?
    As long as China wishes.

  3. Davy on Fri, 4th Aug 2017 9:29 am 

    China is taking a huge haircut, bob, and there is little they can do about it. They cannot project force there and they cannot force a country to give up what it does not have. Bob, sound this out S*C*R*E*W*E*D.

  4. bobinget on Fri, 4th Aug 2017 9:56 am 

    Duly read and S-A-V-E-D, Davy
    Thank you for your brevity.

  5. bobinget on Fri, 4th Aug 2017 2:41 pm 

    MOSCOW, Aug 4 (Reuters) – Russian state oil producer Rosneft in April made a $1.015 billion advance payment to PDVSA, Venezuela’s state oil firm, under a crude oil purchase agreement with the company, Rosneft said in a quarterly financial report on Friday.

    OPEC member Venezuela is struggling to pay back creditors as its socialist economy endures triple-digit inflation and chronic shortages of food and medicine.

    Russia is a close political ally of Venezuela’s leaders. Rosneft Chief Executive Igor Sechin said earlier this year his company, the world’s top listed oil firm by output, would continue to work in Venezuela and would never leave the country. .

    Rosneft has lent PDVSA between $4 billion and $5 billion in recent years, according to earlier Reuters calculations.

    Rosneft also said in its financial report on Friday that it had made advanced payments in 2016 to PDVSA worth an equivalent of a total of $1.485 billion.

  6. bobinget on Fri, 4th Aug 2017 3:05 pm 

    CARACAS (AFP) –
    Venezuela’s money, the bolivar, is sinking faster and faster under an intensifying political and economic crisis that has left citizens destitute and increasingly desperate.

    Its depreciation accelerated this week, after a disputed vote electing an all-powerful “Constituent Assembly” filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.

    On Thursday alone, the bolivar slumped nearly 15 percent on the black market, to be worth 17,000 to one US dollar.

    In a year, the currency has lost 94 percent.

    The decline has been dizzying — yet largely ignored by the government, which uses an official rate fixed weekly that is currently 2,870 to the dollar.

    Ordinary Venezuelans, however, refer only to the black market rate they have access to, which they call the “dolar negro,” or “black dollar.”

    “Every time the black dollar goes up, you’re poorer,” resignedly said Juan Zabala, an executive in a reinsurance business in Caracas……snip

    Time for China to begin injecting medicine, food into the market places.
    Who will take issue with ‘humanitarian aid’?

  7. bobinget on Sat, 5th Aug 2017 5:37 pm 

    Exclusive: Russia, Venezuela discuss Citgo collateral deal to avoid U.S. sanctions – sources

    https://www.reuters.com/article/us-oil-rosneft-citgo-exclusive-idUSKBN1A52RN

    A taste:
    AVOIDING POLITICAL, LEGAL CHALLENGES

    Both countries have a strong incentive to end the current collateral agreement.

    The deal in place now means that Rosneft – which has been under U.S. sanctions since 2014 – would be among the top creditors should the government of Venezuela default on its bondholders.

    Senators have questioned whether the deal could violate U.S. sanctions – designed to punish Moscow for aggression in Ukraine – if Rosneft ever collected the collateral.

    It has also drawn objections from foreign companies seeking compensation for nationalizations by the socialist government of Venezuela under the late Hugo Chavez.

    Canadian miner Crystallex, for instance, has objected to the use of Citgo as collateral for Rosneft’s loan, charging that Venezuela is seeking to reduce its exposure to assets in the United States to prevent Crystallex from ever collecting on its award, issued by a World Bank arbitration panel.

    Extricating itself from a thorny legal dispute could be a boon for Rosneft, provided the proposed package has a similar value as the Citgo collateral.

    But such an arrangement could further squeeze Venezuela’s already troubled state-owned energy company, PDVSA. The firm is laboring under a severe cash shortage and struggling to produce enough oil to cover payments on more than $50 billion in loans from Russia and China that it must pay back with shipments of crude and (snip)

    more on link supplied

  8. bobinget on Sat, 5th Aug 2017 5:39 pm 

    Rosneft has already lent PDVSA at least $4 billion in recent years while increasing its oil stakes in the country, which has the world’s largest crude reserves.

    Venezuela recently offered the Russian company a stake sale in the large oil project Petropiar, operated by PDVSA and U.S. oil company Chevron Corp, Reuters reported in March.

    Rosneft currently has a 40-percent stake in the 140,000 barrels per day (bpd) flagship Petromonagas project at the Orinoco belt, Venezuela’s most prolific oil region. It gets a commensurate share of the field’s upgraded crude.

    The Russian firm also has a 40-percent stake in the Petrovictoria project and a 32-percent stake in the Petromiranda project in the Orinoco, and in two separate joint ventures in mature fields in the South American country.

    Receiving more barrels from PDVSA and Citgo would help Rosneft grow its trading arm, Swiss-based Rosneft Trading SA. And Rosneft could use light crude from the three joint ventures in Zulia for blending its extra-heavy crude from the Orinoco – instead of relying on Venezuela’s pricey and often delayed imports of diluents.

  9. bobinget on Sat, 5th Aug 2017 6:21 pm 

    EVERYTHING depends of Russia getting crude prices over a breakeven price of $65.

    Creating artificial shortages in US will do just that.

    China has little or nothing to gain from higher oil prices at this stage of the game. Working together
    with Russia however, brings the same (crude) security US allowed to slip away in our own back-yard.

    Removing Venezuelan crude from US markets isn’t
    like hurricane storm damage that in weeks can be repaired and everything goes back to ‘normal’.

    The fly in the cheesecake? Both China and Russia
    will control Venezuela’s 18% of the world’s oil supply dictating PoO at will.

    To be fair China and Russia have been busy doing this, gobbling up oil fields all over Asia, Africa, why not S.America?

    When the world’s reserve currency
    the USD is no longer required to trade petroleum,
    the largest crude importer, China, along with Russia make the yuan the alternative ‘reserve currency’.

    Russia, aiming to be the world’s biggest exporter, managed the bring off the biggest oil deal of the young century directly under our noses.

    As far as we can tell, only our Davy is reluctantly paying the slightest attention at all.

    Call me a nut case if you must. Time will tell.

    OBE, CNQ, SU, CPG, ECA, CVE and BTE.
    for LT gain and dividends.

    For ST gain, look at well situated fracking sand.
    (HCLP, EMES)
    If I’m half right, there will be panic buying of fracking sands in attempt to bring on shale, profitable or not.

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