Archive for October 26th, 2010

Those bothersome Venezuelan Oil Export Numbers

October 26, 2010

A while back, like two years ago, I published a table of PDVSA’s cash flow that many people thought was an exaggeration. Hell, I am no oil expert, just love to crunch numbers. I showed the calculation to oil “experts” and not one found a hole in it, but not one endorsed it either.

In that calculation, the “good news” scenario, had PDVSA exporting and getting paid for 1.5 million barrels of oil, while the “bad news” scenario had it exporting and getting paid for 1.3 million barrels of oil a day. Well, it has been my pleasure to hear oil expert Alberto Quiroz Corradi, do a similar calculation in the radio and the news lately. Nelson Bocaranda publishes his numbers today:

China 200,000 a day (no cash flow)

Belarus 200,000 a day (Cash flow?)

San Jose Pact 80,000 a day (50% cash flow)

Caracas Energy Plan 130,000 a day (I think this is 50% cash flow)

Cuba 100,000 a day (Ha ha do I need to say no cash flow, we probably pay shipping too)

Daily Consumption 700,000 barrels a day

Well, if you accept 2.4 million as the country’s production like IEA and OPEC say (They actually says it is less!), then you have 2.4-0.2-0.2-.105-.1-.7~1.1 million barrels a day, taking into account that some does get paid from San Jose and the Caracas Treaty.

I don’t know what Chavez promised Belarus, so I would (for now) subtract that from the total, however, I think local consumption is near 800,000 barrels a day. China may not be up to 200,000 a day …yet

So, add 0.2 from Belarus and 0.1 from China, but subtract 0.1 from more local consumption and you get around 1.3 million barrels a day of real cash flow from oil exports. which at $70 per barrel is US$ 34 billion for a country importing more than US$ 40 billion a year and you see the problem. Except that we have a loan from China, a US$ 3 billion issue by the Republic and now an additional US$ 3 billion in the new PDVSA and things look a little better.

But two years ago, I made the same calculation and now we are up to the worst case scenario!

It could get worse!

Except that Venezuela and PDVSA can’t keep issuing debt ad infinitum or ad absurdum and the model will break down in the next two years.

Oh yeah! Those heavy crude projects? Forget them! There is no money!