Washington, D.C. 703.268.

4453

CRIMINAL JUSTICE INTERNATIONAL ASSOCIATES

7/13/2010

CW 002-2010

PDVSA GOES INTO PANIC

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www.cjiausa.org
Por: Juan José Herrera

During the past five years, the Venezuelan government enjoyed handing out money
hand over fist, and neglected to address two sensitive areas like the oil industry and
electricity. This is the criterion of the economists who responded on the main

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problems facing the government.

jbrewer@cjiausa.org
Government experts believe that oil flowed out by itself and not to worry about
electricity, because the Guri dam was a blessing from Heaven.

Instead of making the investments necessary for the maintenance of wells and
injecting water or steam to increase productivity, it was preferable to distribute in
assignments to “missions” or make special oil discounts to friendly countries without
any control; on the premise that “Socialism 21st Century” does not consider the
financial statements of income or loss valid.

The concerns of previous generations to invest billions of dollars in building dams

were not taken into account. The credits that were assigned in all budgets were
gobbled up by the bureaucracy. The experts concluded that in the past five years
nothing invested in the transmission, to bring water from Guri, halfway around the
country, is then lost in bottlenecks of the central states.

That "something bigger" (Que cosa mas grande), the Cubans would say, because Ali
Rodriguez Araque lost all heavenly protection. After firing more than 20,000
professionals in the oil industry, without any remorse whatsoever, but even though
President Chavez made himself responsible for bringing the oil strike to fall into the
red trap of provoking the strike, it didn´t solve the electricity problem, and much less
did it solve the human deficit by bringing in Arabs and Hindu personnel to run the
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industry, since there was a language problem with those Venezuelan workers that remained. Many
industrial accidents occurred nearly on a daily basis.

Planta Centro never works; repeated blackouts and increasing costs and the small electrical plants
bought from Cuba are useless. In the past eight years, government rhetoric has been to say what they
will do in the future, and when there is a setback- two arguments come to light responsible for all the
misfortunes of the country: The oil strike and U.S. imperialism.

PDVSA is adrift. In these past weeks, all the accumulation of money to spend on the election with new
bond issues of PDVSA was a fiasco. PDVSA panicked. There are new instructions pressing the high
command, which has Asdrubal Chavez, vice president of refining, very worried because the Cardon
and Amuay refineries are paralyzed, and the other catalyst of Petroanzoátegui have to import gasoline
to meet market demands.

Eulogio Del Pino doesn´t know what to do, because since 2005 the Orinoco Belt is paralyzed and the
fabulous investments fail to arrive. They have asked the transnational corporations to bring forward
production schedules "early" and should return to traditional crude oil drilling, to maintain the wells,
because they are only producing 2.4 million barrels a day and it has been more than a year since sweet
oil like Zuata sweet was produced and major units are in bad shape.

For new production that they have projected it will take two years, because so far they have been
dedicated to halting the decline in reserves and production does not rise.

There is no money and are destroying the table 32 to mix oil with extra heavy 8-Api, and the Belarusians
are happy with 80,000 barrels of the best light crude, and we do not know when they will pay since the
Russians lost their financial credit. It is normal for the oil shipments to be paid by the seller (i.e. PDVSA
– I wonder where CIF prices went to the buyer?) and with the last shipment to Belarus, the carrier did
not unload until the payment was made.

China has paid for several years ahead for 400,000 barrels a day, there are another 200,000 barrels of
Petrocaribe, whose accounting for it is unknown. The 900,000 bpd to the United States, even if they
wanted to cut them off which they do not dare, because they are the only ones who pay on time, all the
others are on credit. The remaining 800,000 barrels available to other smaller commitments are not
available for the world’s 5th oil producer.

What about having the world's largest reserves in the ground, and no money to bring it out, or funding to
develop the oil fields? It is pathetic.

Juan José Herrera

"Soldier of Democracy"

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____________________

Juan José Herrera is a contributing writer to Criminal Justice International Associates from Venezuela. He
writes extensively on issues of democracy that face his people of Venezuela, as well as other events in Latin
America that affect the Venezuelan homeland. One of his main concerns is "hemispheric carrying capacity."
He can be reached at jjherrera3000@yahoo.com

Disclaimer: The views and opinions expressed herein are those of the author(s) only, not necessarily those of
Jerry Brewer or Criminal Justice International Associates.

CRIMINAL JUSTICE INTERNATIONAL ASSOCIATES

United States of America

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Jerry Brewer is C.E.O. of Criminal Justice International Associates, a global threat mitigation firm located in
northern Virginia. Website is located at www.cjiausa.org. jbrewer@cjiausa.org TWITTER: cjiausa