Castronoid Latrine Corruption Update 2: How Chavez and Maduro killed Venezuela’s oil industry

Cubanoid Socialist Utopia
Cubanoid Socialist Utopia

Venezuela could be one of the richest nations on earth due to its oil reserves.

Instead, it is now a hell-hole where people are starving, thanks to Castronoid interference.

This article lays out the details of how Venezuela’s oil industry was ruined by Castronoid Bolivarian Socialism.

Venezuela’s PDVSA: The World’s Worst Oil Company

by Steve Hanke

My Misery Index for 2016 placed Venezuela at the unenviable top spot: the world’s most miserable country. However, to gain a real appreciation of the depths of Venezuela’s socialist disaster, we must look under the hood of Petróleos de Venezuela (PDVSA), Venezuela’s state-owned oil giant. After all, PDVSA is, for all practical purposes economically, Venezuela. Indeed, PDVSA accounts for virtually all of Venezuela’s foreign exchange earnings (93% over the past 5 reported years).

An understanding of the workings of PDVSA requires a good grasp of petroleum economics, a field I was introduced to many years ago, when I was on the faculty of the Colorado School of Mines, and where I taught both petroleum and mineral economics. It was then that I had the good fortune to be befriended and mentored by the world’s greatest petroleum economist, the late Prof. M. A. Adelman of the Massachusetts Institute of Technology. I mention this because it is only by learning Adelman’s lessons that we can make sense of the dodgy accounts of what is undoubtedly the world’s worst oil company: PDVSA.

The extent of PDVSA’s mismanagement can be seen by taking a look at its production and reserve figures. Under the direction of Luis Giusti in the 1994-98 period, PDVSA’s production soared. But, that boom was cut short. In 1999, the socialist fire-brand Hugo Chavez became Venezuela’s president and introduced Chavismo. With that, PDVSA’s oil output started a downward slide (see the chart below). That slide became a plunge after the coup attempt of April 2002. It was then that Chavez purged PDVSA of its professionals en masse and replaced them with “reliable” hands – those who worshiped at Chavez’s altar.

After the 2002-03 output plunge, PDVSA’s production recovered somewhat. But, with the death of Chavez and the assumption of the Presidency by Nicolas Maduro in March 2013, another output plunge began.


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