The Devil's Excrement

Financial crisis start not with a bang, but with a whimper
and I just wonder whether that was a very loud whimper that we heard today.

For months, the Venezuelan  Government had been announcing the infamous “Bono
del Sur” a joint issue between Venezuela
and Argentina.
After almost six months, it was finally offered last week, as the biggest
giveaway in history. Essentially, the Government was selling US dollars at a
very steep discount to the parallel market, which last week stood at Bs. 3,000
per US$, while the buyers of the bond could purchase dollars somewhere between
Bs. 2,300 and 2,400 to the US$. .

It was such a sweet deal, that banks and brokers were
offering financing without any guarantees, corporations were putting in
multimillion dollar orders and everyone wanted a piece of the pie and was
counting on getting a piece of it.

Thus, orders were received in such large amounts, that if
you requested more than US$ 5 million or over, you only got US$ 27,000, half of
it in a Venezuelan bond that only pays in local currency, even if denominated
in dollars. According to the Government, they received orders for US$ 9
billion, but I suspect it was more, much, much more. Except if they said how
much more it was, there could be real trouble, as people realize the parallel
market rate only has one way to go: up!

You see, the Government has held the official exchange rate
stable for almost two years, except that in those same two years it hass spent
money as if there was no tomorrow of there was a presidential election coming. Except
that last time there was a devaluation in February 2005, monetary liquidity
stood at US$ 21.3 billion and international reserves at US$ 23.8 billion, while
today liquidity stands at US$ 45.95 billion, while reserves are at US$ 34.6
billion and liquidity should jump up by at least US$ 7.5 billion before the end
of the year.

Thus, while reserves have barely increased by 50% (and
dropping!), liquidity will be up by almost 200% by the end of the year and
there is no stopping it, as the Government spends and spends.

Corporations had been waiting for a bond like “Bono del Sur”
to buy foreign currency, but they got very little today, thus they will move
their purchases to the parallel market in the next few weeks and push the
parallel rate higher.

You see, the Government thought it could fool the rules of
economics and as usual you can, but only for a while. The Government invented
this idea that it could buy bonds from Argentina and turn around and sell
them to “friends and family” at a cheap price, who would make a mint and supply
the parallel market with ample liquidity. And it worked for a while, except that
the rate was kept artificially low as inflation grew, after more than US$ 4
billion was supplied to the parallel market. Then a couple of months ago, the
rate jumped up and since then the Government has been unable to push it down.

Meanwhile corporations waited for the announced bonds,
before going to the parallel market. Bu today they realized they got very little
from the bond and the parallel market is much higher than when they first
started thinking about it. In fact, upon the news of how little was allocated to
each order and that the issue was not increased in size, the parallel market
jumped up and while the last quote of Bs. 3,500 to the US$ was probably never really
paid by anyone, purchases were made at Bs. 3,400 per US$, a full 13% higher
than last Friday.

Those that got the bonds made a mint, a full Bs. 1,000 per
US$ allocated if the parallel rate holds up near Bs. 3,300 per US$. Those that benefited
were those that put in many smaller orders rather than one large one.  But for corporations the message is clear: Don’t
look for the Government to approve much for you in the future.

In fact, there appears to be little the Government can do at
this time. Even if the planned PDVSA issue came to market, it would barely
absorb half of the liquidity to be generated between now and the end of the
year, leaving the pressures on the parallel market out there.

It is in the end a self-fulfilling prophecy: The Government
overspends, creates too much liquidity, has exchange controls in place and in the
end has to create instruments to absorb the excess liquidity. Except that
resources are finite and at some point things catch up with you. For example, a
good rule of thumb is that for every US$ 1 per barrel drop, Venezuela loses
US$ 1 billion in oil income and thus reserves. Thus, so far the recent drop
accounts for some US$ 15 billion in income that has simply disappeared from the
future unless oil prices were to recover.

But if they did, it would just postpone the problem to a
later date. The Government could sell tomorrow US$ 10 billion and pressures
would be barely reduced but reserves would be at levels which would be
considered dangerous for the high monetary liquidity in the monetary system.

In the end, the trap created by the Government is too
complex and only has one simple, quick and perverse solution: devaluation. By
reducing the gap between the official and the parallel rate, pressures on the
parallel market are reduced temporarily, even if no structural solution has
been found to the problem. That is what happens when you run irresponsible
policies like those of this Government. The problem is that it is the poor that
get hurt the most by a devaluation.

Such irresponsible policies are not new in Venezuela, but
they have never been carried out and taken to the levels of today. What is most
incredible is that there seems to be little awareness as of yet, of the problem
the finances of the country are in, unless the events of today opened someone’s
eyes in the Chavez administration.

But I doubt it. My feeling is that today was the beginning
of a crisis that will lead to a larger than expected devaluation in the first
few months of 2006, no matter who wins in December. And unless corrective
measures are taken, what began today with a whimper will end up badly and with
a bang in the next couple of years.

While I
have always respected Brazilian President Ignacio Lula Da Silva, I think what
he did today was despicable and an outright interference with my country’s
affairs and a violation of our rights. He had no
right to say that he was convinced that Hugo Chavez would be reelected,
least of all during an official visit to inaugurate a bridge that has been in
use since four months ago and knowing Chavez was simply using this opportunity
to campaign.

If Lula
really believes that Chavez is like him, like he said, then he should look at
the unfair advantages that the Venezuelan Government has outspending Rosales 12
to 1 on the media and using the people’s resources for it. In contrast with Brazil, where
Lula’s party holds a minority in Congress, Chavez holds 100% of the National
Assembly, controls the judiciary all the way to the Supreme Court and the Chief
General Prosecutor is so sold out to the faux revolution that he can even find
fake witnesses as long as he can charge opposition figures with violent
assassinations. There can be non investigation of Chavez’ abuses, if there was,
he would have been impeached long ago.

Thus, if
President Lula has an effect on the election, which I hope he does not and
candidate Rosales said not
even Lula can save this Government, I would consider him an accomplice of the
fascism and discrimination that is going on in Venezuela, something that I am
sure Lula would not be proud of, as he
seems more of a democrat than Chavez his cohorts are.

I certainly
hope, when and if Rosales wins, that he will remind Lula of what he said and did,
as he exposes the corruption and crime of Chavez and his cronies. While I do
hope that Rosales manages the country’s reconciliation, there are crimes,
particularly human rights violations and corruption, that I do hope he is unforgiving
about. I also hope that that those pollsters that are putting out fake numbers
and are advising and visiting the Vice-President’s office three times a week are
exposed for what they are: men for sale for the highest bidder. And
apparently Lula has been doing some of that bidding or sharing the results.

Brazil should be a friendly neighbor, but to all Venezuelans, not one side, least of all one which pretends to impose a single party, stop the free flow of ideas and perpetuate a nutty autocrat in power.

Lula should
be ashamed of himself.

While Hugo
Chavez has used the terms oligarchs and oligarchy to refer to his enemies and the
opposition in a derogatory manner, after eight years the term has certainly worn off, more so when one
realizes that the “old” oligarchy has been quickly replaced by the
“boli-bourgeois” the name given to the new class of rich Bolivarians
who defend the revolution and are part of the revolution only because they are getting
rich beyond the wildest dreams of the “old” oligarchy, some of which
actually even had to work for it.

In fact, the term oligarchy should have been strictly speaking given up by
Chavez long ago, since never had Venezuela been governed by such a small number
of people and power concentrated on one mad, the autocrat himself, the biggest
oligarch this country has seen since Dictator Juan Vicente Gomez who ruled the country
singled handedly for some twenty seven years. But such is the loss of touch
with reality of current President Hugo Chavez that he does not even realize how
a few members of his inner circle have quickly become the powerful, the rich,
and the decision makers in a country of 26 million people. Add to it the wealth
and what you have is a new oligarchy that no matter what happens on Dec. 3d.
has amassed so much money and power that they will influence the country’s life
for decades to come, much like those that surrounded Gomez and his relatives
did after his death.

The new oligarchy flaunts their wealth in ways never seen in Venezuela. Case
in point is the fact that in 2005 the Government banned all private airplanes
from landing in the La Carlota military airport of Caracas,
saying that for the benefit and safety of the people only helicopters could
land there. And for a while it worked. In fact, a while back I made a post
of actually seeing and talking a picture of a jet plane land in La Carlota,
because it not only violated the law, but showed that some people are more equal
than others under the law.

This is no longer a rarity. Where I live is actually in the landing path of La
Carlota and at least a dozen planes take off and land daily, with increasing
traffic on Friday and Sunday afternoons, as the new boli-oligarchs take off for
the weekend to the fancy resorts of the Caribbean where they can enjoy their anonymity
their new found wealth, without annoying fellow Venezuelans recognizing them or
God forbid, staging a protest against them. To hell with equality under the law
or even the law itself which simply bans the any airplane from landing there,
but the law can be skirted as the revolution is in a rush to have its leaders
enjoy themselves or make efficient use of their new flying toys, which range
from Cessnas to long range jets. Yes, Venezuela
has become the largest growing market for private jets in South
America and the planes are being bought by those affiliated with
the revolution.

As I arrived last week at Maiquetia airport I could not help but see the number
of people meeting the plane with signs with a name of it. We are not talking
about visitors being met as they come out of customs, but people being met
right at the exit of the jet way, before immigration and customs by civilians,
military and pretty ladies in uniform, all there to make sure these visitors
sail through immigration and customs to make their visit to the
“revolution” better. Thus, as I sat there waiting in line to have my
passport stamped, dozens of people just went by immigration without any checks,
led by the usual Government official, who would just drop the passports in a
“special” line for the new oligarchs and their visitors.

Mind you, this not a new practice, it has always existed and I have always
found it distasteful and inconsiderate and I distinctly remember the current
head of the airport announcing the practice would be banned during his tenure.
Well, it hasn’t and in fact seems to have been magnified. There is also room
for the little people to make a buck too, as a guy came up to me and
“offered” to help me get through customs if I gave him a tip. I got
through all right with my stash of wine and cheese without his help, which is
what happens 98% of the time as bored customs agents simply wave most people through
anyway.

Then there
is Scotch consumption, up from US$ 40 million to US$ 100 million from 2005 to
2006. It is, of course, presumptuous of
me to assume that it is the new oligarchy that drinks 18 year old Scotch. But
who else could it be? The old one was perfectly happy with your run of the mill
Johnny Walker Black Label, why would they change all of a sudden? But go into
any Caracas Restaurant and you always find the “special offer” of the
previously rare blue label. But its’ OK, it is not that expensive as it is paid
and subsidized by official CADIVI dollars given out by the foreign exchange control
office, which certainly understands the need for revolutionaries to spend their
newly found wealth.

And that
in the end is one of the biggest dilemma’s of the faux revolution. As the Peruvian Foreign Minister said
today of the Venezuelan Foreign Minister Nicolas Maduro, it all has the
arrogant and overbearing stink of the nouveau rich. And it does and it is
everywhere, the rich revolutionaries do not want to give up neither their
wealth nor their priviliges. They wear red shirts at rallies, but Cartier watches
and Lanvin suits and ties in private, they do not fly commercial, have
purchased the finest properties in the East of Caracas and their kids go to the
best schools. How do you carry out a revolution like that.

The answer
is you don’t. These guys are the revolution’s worst enemies. They no longer want
change, they want to preserve their new status quo, they have become the new
and rich oligarchy.

That is
why we need to get rid of them on Dec. 3d. Unfortunately many of them agree
with us too, as they see a triumph by the opposition as the only guarantee that
they will continue to enjoy their ill gotten wealth. They fear there may be a
revolution after all if Chavez wins and they will have to make some sacrifices for it.

They are
the new Bolivarian oligarchs!

While I
have no idea at this time who is ahead in the polls, the publication of results
by unknown
or obscure polling firms giving a strong lead to the autocrat, simply tells
me that someone indeed knows something I don’t and it can’t be very pretty for
the failed revolution. You see, despite all of the negative press, most well
known Venezuelan polling firms are quite good at getting the numbers right,
even if they can never get the level of abstention anywhere near the correct
level.

This does
not mean that polling in Venezuela
is easy. On the contrary, it is quite hard for a number of reasons, including
fear, atypical educational levels across the lower social strata of the
population, differential behavior between urban and rural areas and lack of
personal safety in some areas where polling needs to be done. Add to that the
fact that abstention is likely to be quite different among pro-Chavez, anti-Chavez
and the undecided and the 2006 election is likely to be one of the most difficult
to predict with accuracy in the country’s history.

Thus, when
unknown and inexperienced pollsters like Zogby or Evans and McDonough are all of a sudden splashed all
over the news and their results reprinted in pro-Chavez ads. And when you have
to yet hear from Chavez’ traditional pollsters, you have to wonder. In fact a
look at the latter’s webpage shows few press releases in the last two years and
none of them on the electoral area.

But the signaling is all over the place, somebody is definitely very
worried, as the usual tactics than the intolerant revolutionaries had accustomed
us to, no longer seem to work to stop the opposition candidate. Only about
eight weeks ago, most of Rosales’ rallies or visits to barrios were met by your
customary band of thugs and paid muscle, intended to scare away the opposition
candidate much like the new Venezuelan Ambassador to the UN was scared away
from coming close and campaign among the poor in 2000.

Except this time it does not work. For one, it is getting hard to
volunteer the thugs and paying them daily was certainly expensive and obvious
when the same faces appeared everywhere, so that the Chavista bands became in
most cases a specter of their old self and they also had to confront
increasingly larger crowds of Rosales’ supporters that made them look somewhat
ridiculous. In addition, Rosales was not like Arias Cardenas, a newcomer to
politics, but a man with a plan and that plan included going out and getting in
touch with the people day after day, as the main strategy to gain the support
behind him. And it’s working very well.

Thus, the strategy shifted from trying to stop things from the bottom to
trying to command them from the top a la
Seniat or Ramirez in PDVSA. And the signaling is very clear, Chavismo is very
worried, they must know more than we know about the numbers, although we can
see the difference in the size of the crowds. Compare the clean, red-shirted groups
of Chavistas, limited in size, with the massive rallies that Rosales holds everywhere
and the size of criwds even in towns I did not even know existed like in this
picture in Alek’s page, from San
Francisco, Estado Zulia.

But the strategy seems to have backfired, with polls that were giving
Chavez a lead a scant ten days ago showing him losing ground fast in response
to the widespread abuse of public workers’ rights at too many institutions by
an electorate that is already unhappy about Chavez and his revolution even if
maybe still dubious of whether or not to go and vote for Rosales.

A second strategy has been to suggest the image of a violent opposition,
as if it had any weapons or was calling for people to be armed and ready like
the Government certainly is. We hear daily warnings about how the Government
will be forceful at any attempts at unrest or protest of the results of the
elections as if it were the opposition’s fault how the vote has been set up in
order to make the process have as little transparency as possible.

If the Government wanted quick and easy acceptance of the results on Dec.
3d. it should ask the CNE to withdraw the treacherous fingerprint machines and
the counting of 100% of all of the paper ballots and not daily press
conferences threatening the opposition if they do not abide by whatever number
comes out of the CNE no matter how outrageous it may be. In fact, today
Rosales challenged Chavez to ask for the removal of the fingerprint
machines, which are coincidentally going to be used only in eight of the top
nine states in terms of public employees in the nation.

And then we are also thrown the threat that the Armed Forces are “Rojo,
rojo…rojito” as that institution has more cracks than the earth’s mantle. But
we are supposed to believe it is united behind the revolution, when there is
clearly lots of infighting within the various forces. And we see it daily in
the many Generals that speak publicly contradicting each other. Did you know
that the Commander General of the Navy was named five months ago, but has yet t
be sworn in? Or that the General in charge of one of the largest regional
commands of the National Guard has refused to hand over the position to his successor?
Such is unity under the revolution.

And the divisions are repeated daily. Rosales asks to meet with the
Chiefs of Staff and one General accepts, but the Minister of Defense says he
will not meet with him. Another General says that the Armed Forces have to be “Roja,
roja…rojita” only to be disallowed by the same Minister of Defense. Meanwhile, nobody
knows what the Air Force Generals think, as they have few planes that fly and
are still awaiting for their new toys, while the rank and file of the Army
wonder whether the reserve created by Chavez is one day supposed to be the new country’s
army.

And it is in fact quite scary to see those divisions and the infighting within
the military. In 1992 when Hugo Chavez staged his infamous coup, most
Venezuelans thought that the era of military coups and military men trying to
overthrow Governments was over. Chavez brought it back and while it led him to
power, it also revived the ambitions of many of his colleagues, such as the
Zen-loving Minister of Defense, who reportedly believes he could be a much
better President than the autocrat.

And maybe that is also what worries some of the leaders of the Chavez administration,
whether what is stake may be more than simply Chavez versus the opposition if
things get stirred up on Dec. 3d. While Vice-President Rangel has kept a cool
stance, others have even accused people in Government to be conspiring against Chavez.

And then of course there are the armed groups that say they refuse to
accept a defeat of Chavez on Dec. 3d., introducing a potential source of
violence and conflict after the results are out.

And therein lies the danger of suggesting erroneously that one side or
the other is winning by a landslide. We all lose in the end. In the absence of
transparency in the voting process, the losing side will refuse to believe the
outcome, whatever it may be. (Remember the Chavistas complaining about the
fingerprint machines in the special Carrizal election?) And there are signs
that even Chavez may understand this, as even he raised the possibility of his
loss the other day saying that he would hand over power if he lost. (See it, to
believe it.)

Hopefully, any potential conflict will be resolved by the politicians and
not by the military even if in this Government it is sometimes hard to differentiate
them. The alternative is to go into even more unknown territory than another
six years of the silly revolution signify.

But it’s cool to see the usual suspects squirm and worry anyway.

This week,
the Venezuelan Government announced that it would issue the “Bono Del Sur” a
combined issue of a Venezuelan bond with an equal part composed of two
Argentinean bonds.

After
enriching some of the Government’s buddies with the sale of Argentinean bonds
for months, the Government decided to give the rich a nice Xmas gift, bonus and
subsidy right before the election.

And the
poor you may ask? Well, you know…we all want to change the world, as the
Beatles song used to say.

You see,
this bond is simply an outrageous gift for those that can afford buying it and
converting the Argentinean part into US$ at the incredibly bargain rate of Bs.
2330 per US$, compared to the parallel market rate which ahs been hovering
around Bs. 3,000 per US$ for the last few weeks.

It is also
a gift for the banks and other financial institutions, which will buy the
Venezuelan part of the bond, a dollar denominated bond, which pays interest
only in Bolivars at whatever the official rate maybe and which will pay capital
also in Bolivars when it matures in 2017. You see, people and corporations will
buy the whole Bono del Sur only to get at the US$ from the Argentinean part,
but they will quickly sell the Venezuelan part to the financial institutions
who are interested in getting them, because they will be protected from future
devaluations. (Banks are limited in how many dollars they can hold as a
percentage of their equity)

The third
beneficiary is the “poor” country of Argentina,
which has a higher GDP per capita than Venezuela
and whose citizens also have a much higher educational level than Venezuela.

Meanwhile
while banks are given some protection the poor of this country have absolutely
no protection from all of the financial shenanigans of this Government, which are
slowly creating conditions which are simply untenable and may only be corrected
in the future by a devaluation.

Of course,
the autocrat today was
bragging that the issuing of this bond was an “economic luxury” showing how
ignorant he is about what is being done under his so called leadership. This is
not a luxury, this is an irresponsible waste of money, which subsidizes the least
needy and imposes a new debt burden on everyone in a country which has enjoyed
in 2006, the biggest windfall in any twelve month period of its history. About
the only benefit it has is the fact that it will sterilize US$ 1 billion of the
monetary liquidity, which in any case only exists because of the irresponsible
spending policies of this cynical Government.

Things are not going to be all right like in the
song…

Yesterday Venezuelan President Hugo Chavez said that
he opposed the death penalty for his former buddy Saddam Hussein,
because he was opposed to that punishment as a matter of principle,
adding that if anyone deserved it, would be the US President whose name
I tend to forget.

Today, opposition candidate Manuel Rosales sent Hugo Chavez
a letter asking him to intervene with his new buddy, Iranian President
Maud Ahmadinejad, to help stop the stoning of seven women in that
country.

Rosales says in his letter “I address you in your character as
President of the Republic to request that given the profound strategic
and personal relations that you have established with the Islamic
Republic of Iran, you make use your relationship with that regime to
avoid that an action be committed which is revolting to human
conscience…it is necessary to add that the regime of President
Ahmadinejad had agreed to respect the International pact on civil and
political rights which is violated with this recent decision…the
reasons given against these seven women do not merit any punishment
and demonstrates an outrageous scorn against the condition of women and
the requiremnets of freedom…hoping you will act with the elemental
respect for the dignity of women, justice and human rights…”

This is part of a campaign by NGO Amnesty International to prevent the stoning of these seven women and stop the practice in Iran. Chavez has been critical of AI for its reports on Venezuela, which coincidentally agrees with Chavez on not giving Saddam Hussein the death penalty.

Thus, at this time, Rosales has certainly asked Chavez to put his money where his mouth is. Will he do anything?

And what will his Iranian buddy reply to him?

Stay tuned!

And here is an even better version of Rosales visit to the Caracas-Magallanes game last night in Caracas. This video took place at a different point probably when Rosales first arrived, while the one I posted this morning took place afterwards as he sat to watch the game

Last night Rosales went to the Caracas Magallanes baseball game at the Estadio Universitario, the video speaks for itself

Funny how
Minister Ramirez did not even mention once in his now infamous speech, that people
had to work harder, or make PDVSA more efficient. It was all politics as usual
in the new “red, roja…rojita” PDVSA of Ramirez.

So, we sit
here still waiting for the company’s 2005 audited financials or 2004 ones for that matter. In
both cases we saw a supposed glimpse of the financials in press conferences and
full page ads in the papers, but there is as yet no published audited financial
statements from KPMG in print despite the promises. Score a negative point for
the “Roja, roja…rojita” PDVSA of Ramirez’ dreams and nightmares.

Of course,
without a full audited financial statement there is not much you can say, but
there are some things you can find that simply don’t work out. Toby Bottome of
Veneconomy has done a lot of this digging, doing an outstanding job as usual, here are some of his highlights:

—According
to the overview of the financials published, domestic consumption in 2005 was
506,000 barrels per day. This is somewhat strange, you see in 2001, a full four
years earlier and with gas more expensive in real terms and half a million cars
less on the roads, Venezuela had an average consumption of 458,000 barrels per
day, which makes little sense. Even worse, “domestic consumption” has always
been very simple to calculate, you subtract exports from production and except
for minor adjustments you get the right number. Well, this rather simple
formula does not work in 2005, as you get 281,000 barrels per day of local
consumption which is simply non-sensical.

So, you
can either assume the numbers are fudged or as Toby himself suggests, this is simply
a reflection of the fact that Venezuela
is importing significant volumes of oil or gasoline to satisfy the local market
due to production or refinery problems.

Score
another negative one for the Roja, rojita…

—PDVSA
claims that it is producing 3.27 million of barrels of oil a day in order to
make it look as if the country’s production was not affected by the strike. However,
this includes production figures for NGL and orimulsion production which was
never included in the old numbers. But let’s see what the company’s production
numbers say:

According
to PDVSA, the average export price for the company was in 2005, US $46.15 per
barrel. You may think that this should be enough to figure out how much the
company’s revenues were in 2005, but it isn’t. The reason is simple; PDVSA has
offshore operations which consolidate in the revenues. Thus, in the absence of
a breakdown, you can fudge the numbers by passing them from one side to the
other.

Veneconomy’s
calculation does that. It figures out that if one believes PDVSA’s numbers at
face value (Production and export figures were provided by the Ministry to the
auditor but not necessarily audited) then export revenues were US$ 31 billion,
which seems about 380,000 barrels or US$ 6.4 billion too high to be consistent.
But you see, there seems to be a shortfall of roughly the same amount in
offshore operations! Thus, global sales are right, but not exports, cute, no? In
fact, earnings reflect the same problem; despite 40% higher prices offshore
operations only earned 20% more, which makes no sense.

—Investments:
Total investment was US$ 3.88 billion of which only US$ 2.83 billion was in
exploration and production, well below the announced budget and considered not
to be sufficient for sustaining production. Moreover, this is absolutely inconsistent
with increasing production to 5 million by 2012.

—Production
Levels:

The following
table summarizes production levels since 2001, so that people can clearly see
the loss of production even with the lying included!

                                       2001 2002    2003      2004  2005

PDVSA own                    3.21    2.71    
2.38        2.62   2.67

PDVSA share assoc         .05      
.11       .17          .21    
.23

Assoc                                .14      .14     
  .25         
.31     .37

Total                               3.40    2.97    
2.81      3.15   3.27

As you can
see PDVSA’s own production has fallen by at least half a million barrels since
2001, even if you believe official figures, which the numbers do not bear out. What
has saved the day are the 600 thousand barrels a day of the associations which
were all ready and set before Chavez took over in 1998.Not another triumph for the
“Roja, Roja,..Rojita”

—Costs:
Even if Ramirez did not mention it, let’s see how efficient the “roja, roja…rojita”
PDVSA is. Well, to produce less oil, PDVSA spent US$ 3.29 billion more in 2005 in
administrative and selling costs than in 2001, despite the lower investment.

There is
much more, but these tidbits clearly show there is little to be proud of, no matter how deep the red color goes.