Pandemonium in Venezuela.

[Bhimsen Pachawry + 72]

54 minutes ago, Refman said:

Labor is already essentially free, with many making the equivalent of a couple of dollars per month, so even if people volunteered it would make little difference. Workers at PDVSA are literally quitting their jobs because the cost to travel to work is higher than their salaries. One of the reasons many stayed as long as they did was for the company cafeterias where they got free food, now even those are closed. There is little incentive to stay and work.

The main problem is that Chavez (and now Maduro) started siphoning off money from PDVSA as soon as he took power. There has been virtually no maintenance done on oil infrastructure since 2000. You can put off maintenance for a couple of years when times are hard, but doing it for 18 years is asking for trouble. Now people are so desperate they are stealing wiring and other parts from the oil wells and refineries, so that they can sell them for scrap in order to buy food.

The problem with the logic that Venezuela had no servicing since 2000 is that the oil production of Venezuela had actually see drastic increase even as recently as 2014 after which the oilprice crash caused Venezuela oil production to decline:

If Veezuela was as badly managed, how did it work till 2014 so fantastically well? If there was no maintenance, how did Venezuela increase oil production to touch 3 million barrels a day in 2014?

The main problem with Venezuela is that it needs oil imports from long distances to blend its ultra heavy oil. If that blending need is cut down by using fisher tropsch method, then the oil will nly see one way flow - exports. So, unreliability of imports can be reduced drastically and the oil exports can be boosted. It is true that with F-T method, there will be significant wastage. 10 barrels of oil may be able to produce only 4 barrels of liquid product from the heavy oil. Rest will be either used up in oxidation or become petcoke. But even that is acceptable as Venezuela has large quantity of heavy oil reserves.

[Refman + 207]

Some of that can be attributed to outside companies that continued to do work in Venezuela, despite racking up a lot of unpaid invoices. Eventually they realized they were never going to get paid and left.