Venezuela Says Trump Ban on Petro Backfires

U.S. President Donald Trump's ban on the Venezuelan oil-backed Petro cryptocurrency was free publicity for the cryptocurrency and even helped it double the number of interest investors.

Trump's twitter account at it once again. 

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I know, I'm just trying to think of things that need better advertising. Maybe Oilprice.com should go on an anti-Trump binge for some free Twitter ads?

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Maduro can spout this crap all he wants, but in the end, this El Petro is a nonstarter. When PDVSA crashes and burns, El Petro will go with it. 

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This is the best example that even bad publicity is a great commercial. 

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10 minutes ago, Adam Varga said:

This is the best example that even bad publicity is a great commercial. 

I agree. No publicity is bad publicity. Still, it's like Maduro is desperately trying to force feed the rest of the world this cryptocurrency.

today's headline:

"Venezuelan leader Nicolás Maduro has revealed that the country’s state-owned companies may start charging for exports in the country’s oil-backed cryptocurrency, the Petro "

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Venezuela's 'El Petro' saga just gets weirder and weirder....

In the latest development, the National Assembly, which once called the crypto a 'tool for corruption' has not decided that it is, in fact, constitutional.


I can't wait until someone buys it and then Maduro dips off to Puerto Rico with the rest of the backwards billionaires

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Hello

I'm Manuel Varela, a retired oil and gas professional, chemical engineer and MBA. Worked for PDVSA and Shell Venezuela mainly in business development and International Trade from 1989 to 2006. In the last decade I have been involved in some projects and activities as an educationist.

I am looking forward to this forum as a source of knowledge and means of sharing useful and meaningful information.

Many thanks in advance.

Manuel Varela

 

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1 minute ago, Manuel Varela said:

Hello

I'm Manuel Varela, a retired oil and gas professional, chemical engineer and MBA. Worked for PDVSA and Shell Venezuela mainly in business development and International Trade from 1989 to 2006. In the last decade I have been involved in some projects and activities as an educationist.

I am looking forward to this forum as a source of knowledge and means of sharing useful and meaningful information.

Many thanks in advance.

Manuel Varela

 

Welcome, Manuel! Nice to have you onboard. Looking forward to getting your take on all things Venezuela!  

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16 minutes ago, Manuel Varela said:

Hello

I'm Manuel Varela, a retired oil and gas professional, chemical engineer and MBA. Worked for PDVSA and Shell Venezuela mainly in business development and International Trade from 1989 to 2006. In the last decade I have been involved in some projects and activities as an educationist.

I am looking forward to this forum as a source of knowledge and means of sharing useful and meaningful information.

Many thanks in advance.

Manuel Varela

 

Welcome Manuel - Great to have you part of the community! 

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Whatever the subject, it is hard to make objective assessments without starting with the background and premises of the situation. In the case of the Bolivarian Revolution it is very important to reveal the underlying forces at play. Believe it or not, a good chunk of Wall Street is among them and are the "genious" behind such creation as the Petro. Of course they are going to help as much as they can deceiving some investors the same way they did placing Venezuelan and PDVSA's bonds. They dream of watching Maduro win over Trump, but it is going to be tough this time. Trump's opposition is real. Venezuelan Government can no longer count with the complicity of the Clinton-Bush-Obama Regime, period

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Would love to hear more about the Wall Street forces behind the Petro if you're willing to share. 

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20 minutes ago, TraderTate said:

Would love to hear more about the Wall Street forces behind the Petro if you're willing to share. 

I doubt anyone in their right mind is getting down on El Petro - it's a shady centralized trash coin. Plus, U.S. firms are forbidden to buy/sell it.

I covered the launch here, if you are interested. It's full of fun - hacking, kidnapping, corruption, lies, betrayal, and deceit. The 'launch' was basically a game of thrones episode. I just can't decide if Maduro is Joffrey or Euron Greyjoy.

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Welcome Manuel!  It appears to me that years of underinvestment in maintenance, development and infrastructure is the primary reason why oil production in Venezuela has declined so precipitously over the last year.  While much of the money needed for that purpose has been spent to try to address poverty in the country, Unfortunately that policy turned out to be shortsighted.  My concern is that our policy may also turn out to be shortsighted in that it may leave Venezuela no choice but to turn their oil resource over to the Russians and/or the Chinese in exchange for enough royalties to meet enough of their citizens needs to perpetuate what is essentially a failed system indefinitely.  What are your thoughts about this?

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Two assumptions or premises in your rationale are not exactly true: First, indeed there is underinvestment driven by corruption and incompetence, but the main reason for the sharp decline in oil production in the last two years is the lack of profitability of Venezuelan oil wells, very high costs, probably a "Cash Cost" above 35-40 $/bbl on the average with some wells above the 75 mark which are being shut down. To make things worst, these outtlays are mostly in hard currency making it impossible for PDVSA as dollar reserves have been depleted.

The premise that Venezuela have the largest proven reserves of crude oil in the World is just a propaganda campaign backed by Wall Street aimed at issuing debt first and now justify things like the Petro and keep the rethoric that the "Empire wants our oil". We all know those "reserves" are very heavy, tar sands and bitumen of the Orinoco Belt with an extraction cost well above the current market price, let alone the massive investment required in converters (refineries) to produce the associated sinthetic crude. The Russians, Chinese, Spaniards are doing nothing there, only helping the oficial propaganda, but won't ever produce a single drop of crude.   

Another very questionable assumption is that Venezuelan Government has spent the vast amount of money earned (oil revenues plus debt) addressing poverty in the country. That money is in the private foreign bank accounts of the oligarchy given for free at ridiculously low and subsidezed exchange rates.

Manuel Varela

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1 hour ago, Manuel Varela said:

Two assumptions or premises in your rationale are not exactly true: First, indeed there is underinvestment driven by corruption and incompetence, but the main reason for the sharp decline in oil production in the last two years is the lack of profitability of Venezuelan oil wells, very high costs, probably a "Cash Cost" above 35-40 $/bbl on the average with some wells above the 75 mark which are being shut down. To make things worst, these outtlays are mostly in hard currency making it impossible for PDVSA as dollar reserves have been depleted.

The premise that Venezuela have the largest proven reserves of crude oil in the World is just a propaganda campaign backed by Wall Street aimed at issuing debt first and now justify things like the Petro and keep the rethoric that the "Empire wants our oil". We all know those "reserves" are very heavy, tar sands and bitumen of the Orinoco Belt with an extraction cost well above the current market price, let alone the massive investment required in converters (refineries) to produce the associated sinthetic crude. The Russians, Chinese, Spaniards are doing nothing there, only helping the oficial propaganda, but won't ever produce a single drop of crude.   

Another very questionable assumption is that Venezuelan Government has spent the vast amount of money earned (oil revenues plus debt) addressing poverty in the country. That money is in the private foreign bank accounts of the oligarchy given for free at ridiculously low and subsidezed exchange rates.

Manuel Varela

Interesting take, Manuel. can you point us to sources regarding the viability of getting Venezuela's current reserves out of the ground? 

Thanks!

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Petro cryptos are just getting started.

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First of all, Venezuelan Government and PDVSA's officials claim what you refer to as "current reserves" are proven oil reservas regardless of the estimated cost of extracting this crude from the ground. Inexplicably, the USGS backs that claim or assumption. However, we all know that proven reserves are defined as economically viable under current market conditions with an existent technology. Well, estimates made by PDVSA itself and Shell (where I worked) place that cost above USD 150 per barrel. In addition, a converter like SINCOR that is capable of processing only 250,000 bpd represented an investment of 5 billion dollars according to TOTAL who built the plant. How in this world may Venezuela, a country that can not import food and medicines for its people think of exploiting the Orinoco Belt? To make it more laughable and amusing, the task is to be accomplished by bankrupt PDVSA completed depleted of funds, technology and competent human resources...

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