Today the Podcast Podcast Economy
Venezuela's two presidents vie for control of oil bill
In Venezuela, where self-proclaimed President Juan Guaido and incumbent President Nicolas Maduro vie for power, the battle also goes through the control of black gold revenues.
Outside Juan Guaido must seduce the chancelleries. In the interior of the country he needs the support of the military, but he must also, as soon as possible, put his hand on the sinews of the war: the oil money. In this oil-drained state where the economy is in ruins, the black gold remains the largest purveyor of legal cash. Juan Guaido announced on Friday (January 25th) that he wanted to put the sector under his authority by appointing a new Petroleum Minister, a new leader for Petroleas of Venezuela (PDVSA) and another leader for his American subsidiary, the Citgo Nugget, which is the largest importer of Venezuelan crude.
The United States is in fact the first outlet for Venezuela's oil?
Venezuela produces more than a million barrels a day, and it sends half to the United States and its American subsidiary Citgo makes honey. With its 3 refineries, multiple stake in pipelines, Citgo (which was established in the state of Delaware, well known for its tax facilities), is worth $ 10 billion today. This year it has already released $ 500 million in net income. This flourishing company has long been the cash machine of the Maduro regime. Until Donald Trump prevents him from repatriating his income to Caracas with the sanctions put in place in August 2017. But Citgo continues to process and market Venezuela's crude oil because the US president has still not triggered fatal weapon that would kill this cash cow, that is to say, an embargo on oil imports from the Orinoco.
Does Juan Guaido have the human, legal means to take over this company?
American oil experts have trouble seeing how he could unilaterally take control of the company and recover the revenues. With less than a boost from the US administration. But the case is getting worse as many US companies rely on the seizure of property Citgo to recover the money they lost in Venezuela. To give the keys of the vault to Juan Guaido would thus be to hurt definitively these companies. For a president who only acts in the name of America first, it seems unlikely, but why not. And then Nicolas Maduro did not sit idly by the announcements made Friday in a press conference by Juan Guaido. The president of Citgo, a cousin of the late Hugo Chavez, was recalled to Caracas and the management team was sent to the Bahamas where Citgo reactivated an office. Another foreign player is closely following the evolution of the case, Russia.
Vladimir Putin is one of the fervent supporters of Nicolas Maduro.
If China is by far the first creditor of Venezuela that the Bolivarian regime repays in barrels of oil, Russia comes second. With a very offensive strategy: it delivers weapons to Nicolas Maduro and above all, via Rosneft, it invested in the direct extraction of crude to exploit the fabulous Venezuelan reserves which are considered the largest in the world. Rosneft is present in five projects and has taken care to secure its investment by obtaining a 49% stake in the American nugget Citgo. This chicken with golden eggs is so coveted, and no one has interest in having her eggs broken in the maneuver.
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