How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

[Zorro]

One oil rig was idle for weeks because a single piece of equipment was missing. Another was attacked by armed gangs who made off with all they could carry. Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs.

Venezuela’s petroleum industry, whose vast revenues once fueled the country’s Socialist-inspired revolution, underwriting everything from housing to education, is spiraling into disarray.

To add insult to injury, the Venezuelan government has been forced to turn to its nemesis, the United States, for help.

“You call them the empire,” said Luis Centeno, a union leader for the oil workers, referring to what government officials call the United States, “and yet you’re buying their oil.”

http://www.nytimes.com/2016/09/21/world/americas/venezuela-oil-economy.html

[louis-t]

1. What changed there?

Did the con-servatives take over?

[EX500rider]

2. No, the United Socialist Party of Venezuela has basically been in charge since 1999..

(under that name since 2007 but same actors)...and has run the country into the dirt all on their own.

[hack89]

3. Economic mismanagement

The government pissed away billions, ran up huge debt and neglected the oil producing infrastructure. It all fell apart when oil prices collapsed.

[FBaggins]

4. This really isn't news

Yes - Venezuela is in really deep trouble, and yes, it's directly caused by corruption and mismanagement from the very top

BUT - this isn't evidence of that.

Venezuelan oil is extremely "heavy". So much so that they can't sell it to many customers because they can't process it. They have to bring in "lighter" oil to blend it to a point that it can be sold. They've done this for years. The only real change is that US oil wasn't available for export until fairly recently... so their imports came from someone else.

Where the current economic crisis could come into play is that rather than blend their crude with lighter products, they could instead employ some specialized processing equipment. Of course, they lack the capital to purchase/install that.