Archive for the 'Pictures' Category

A picture is worth more than 10,000 words #34: Oil prices do not corralate with oil income

September 30, 2007

This graph, ripped off from Santander Investments, shows the low correlation between the Venezuelan oil basket and oil revenues as reported by the Venezuelan Central Bank (less than 0.25 according to Santander). This is a clear example of the lack of transparency and the lack of credinility of the numbers thew Government publishes. Imagine after the Central Bank is no longer ‘independent”!!!


A picture is worth 10,000 words# 33: Central Bank’s study of the population

July 30, 2007

This is a puzzling graph which appeared in El Universal a couple of days ago and I don’t quite know what to make of it, it is the Central Bank’s (BCV) study of Venezuelan homes:

1) It says Venezuela was mostly a middle class country in 1997 and has remained the same since.
2) There has been little change since 1997. Only 1.1% of the poorest families moved from strata V tto IV.the biggest change is in the increases in the seond strata, which is fully middle class
3) Given the change in the price of oil between 1997 and 2005, you would think even spending the money inefficiently would have a larger effect.
4) It disagrees with data from the INE, the national Institute of Statistics and the data from Universidad Catolica.

What gives?

A picture is worth 10,000 words# 32: Estimating Venezuela’s gas consumption

July 30, 2007

PDVSA’s black box does not tell us what is the national consumption of gasoline and diesel of the vehicles in the country. Recently a presentation by PDVSA’s former economist Ramon Espinasa, put the number at 770,000 barrels per day. In this post we estimate the number using the growth in vehicle sales in the last few years and compare it to Espinasa’s

In the figure above (which has a shift in the x-axis (My Mac died, using Windows!), that is, the first point corresponds to 2001, the last one to June 2007), we plot the total number of vehicles in the country, using the sales reported by Cavenez and adding them to the number of vehicles estimated to exist in the country in December 2000, subtracting a small attrition rate per year.

In the graph below, we assume gasoline and diesel consumption increases proportionally to the number of vehicles. Then, we use the total number of barrels of gasoline and diesel sold by PDVSA’s Deltaven in 2000, which represented 51% of the country’s sales, according to PDVSA’s 2000 SEC report and extrapolate year by year to obtain the graph below.

The number I come up with is 750,000 barrels per day, which is quite and similar to Espinasa’s number. In fact, given that the price of gas has not changed since 2000 in local currency and that the currency has depreciated officially by roughly 200% and unofficially by 500%, then it would seem logical to believe that people are using more gas than ever or that more is being smuggled to Colombia due to the price differential.

Thus, if you take Espinasa’s production (or IEA’s or OPEC’s) this type of number, you get that Venezuela’s exports can be no more than 1.63 million barrels of oil a day.

A Picture is worth 10,000 words #31: Active drilling rigs in Venezuela

July 15, 2007

From Espinasa’s presentation: Number of active drilling rigs in Venezuela since 1990. Somewhat low since Chavez too over and now if you signed against Chavez and you work at a rig, you are out!

A Picture is worth 10,000 words #30: Venezuela’s Crude oil exports

July 14, 2007

From the same presentation as before, the evolution of Venezuela’s crude oil exports since 2000, showing what PDVSA exports and adding to it the exports of the heavy crude partnerships of the Orinoco oil belt. Clearly, the situation is not pretty as the combination of lower production and higher internal consumption has lowered the export of the country’s main source of income significantly. The trend is certainly not the Government’s friend.

A picture is worth 10,000 words #29: Venezuela’s crude oil production

July 12, 2007

The graph above shows Venezuela’s crude oil production according to the IEA since 2,000. The red line is crude production without the heavy oil partenrships, while the black is total. The plot also  shows the daily consumption of gasoline in the country which is already up to 770,000 barrels a day.  Not a very pretty picture.

(Taken from a presentation by PDVSA’s former Chief Economist Ramon Espinasa)

A Picture is worth 10,000 words #28: Liquidity and International Reserves send ominous signals

May 15, 2007

And our illustrious and rarely seen Minister of Planning came out today to tell us about the 8% growth in the first quarter. Of course, he said nothing abour the 47% drop in the current account surplus, or the US$ 8 billion deficit in the capital acount, or the contraction in oil GDP. More ominously, he was Minister of Planning the last time liquidity and reserves began looking like this, which led to a maxi devaluation in 2002:

On the left, you can see that ominously, international reserves have dropped significantly and there is more to come, while on the right you can see that monetary liquidity has stabilized due mostly to the issuance of debt. Minister Cabezas says reserves will be back up to US$ 30 billion by the end of the year, which is possible, but liquidity is likely to be up by at least 40% by then, igniting the fuse for a big devaluation, just like in 2002.

A picture is worth 10,000 words #27: Revenues from oil exports and poverty

April 16, 2007

You would think there would be an effect, no?

A picture is worth 10,000 words #26: Population, oil prices, oil income and oil income per capita

February 5, 2007

First of all, let me clarify, these figures are not exact, but they tell the story I wanted to tell. To build these figures, I used population data from here and from INE. I found WTI oil prices going back a while. I could not find Venezuelan data going back to 1970, but I know it was about 4.5 million barrels a day then, so I extrapolated that down to 2006 with 3 million barrels, even if I don’t believe production is that high. Similarly, I adjusted WTI to the Venezuelan oil basket using 10% up to 1999 and then 15%. So, it is all approximate, but as you will see the results do not depend on the details.

On the plot above on the left I show WTI average oil prices since 1970, together with the Venezuelan population. The red line is oil price with the left scale, the blue line is the population in millions, which starts around ten million in 1970 and is around 26 million today.

The plot on the right shows total oil income per year (red line, left scale in billions), while the blue line, right scale shows oil income per person each year.

The first thing to notice is that oil income was never as high as it was last year. Moreover, the last three or four years have been the highest accumulated income in history. However, because of the increased population, oil income per capita is not at a peak. Note from the graph that from 1984 to 1998, income was down significantly, total or per capita, which explains why things went down so fast in Venezuela, during those 14 years. However, at the same time, during the last six years, things have been pretty good, but nevertheless things have not improved for the people as much as they should have.

More importantly, note the volatility of the Venezuelan economy with swings from $10 billion to $60 billion in total oil income per year from bottom to top. A factor of six up or down, can swing your popularity mighty fast!

Celebrating February 4th. 1992 Factoid #7: Accumulated Inflation since Chavez took over

February 4, 2007