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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