Venezuela... more to it than meets the eye

It was the Aragon’s King Ferdinand II and the Castilian Queen Isabella I of Spain who sought to unite the many realms existent in their country during the late 15th Century, either through great deeds, discoveries, wealth and religious fervour.
Their Conquistadors, Alonso Ojeda and Amerigo Vespucci in 1490, first saw the houses built on stilts in the Maracaibo basin on the Caribbean coast, named the region Venezuela, or ‘Little Venice', after the Italian canal city. Making landfall, Vespucci noticed the ‘sticky black substance’ called ‘mene’ by the natives, that stuck to their boots in the wilds of the Maracaibo but saw it only as pitch, for caulking vessels, and virtually worthless.
Fast forward to 1910, and the search for oil was global, fed by the second, fuel oil-powered, industrial revolution. President Juan Vincente Gomez signed over numerous leases and concessions to overseas interests from, among others, American General Asphalt and Royal Dutch Shell, who formed a joint venture, the Caribbean Petroleum Company. Then on April 15, 1914, the first significant find, at the Zumaque-1 well, was made, and within four years Venezuela was exporting its ‘black gold'.
By 1943, Venezuela was producing nearly 30 million barrels, and the industry had been nationalised, all concessions renegotiated to 50/50 splits with the government. Within another decade however, the establishment of the Organization of Petroleum Exporting Countries (Opec), would change the global dynamic, and although Venezuela was now producing 400 million barrels a year, its oil had a high sulphur content at 3.4 per cent, and is regarded as ‘heavy', or ‘sour’ oil, while the newly discovered Middle Eastern product ‘sweet and light', at 1.4 per cent is far cheaper to produce, process and transport.
By the 1970s, Venezuela’s volatile politics, industry uncertainty and erratic ‘re-nationalisation’ had seen American investment by companies such as Chevron, Exxon and Conoco, fluctuate within the national entity of Petroleos de Venezuela (PDVSA, 1976), and the volatility of the sector caused Oil Minister Juan Perez Alfonso to warn that without political stability, industry investment and social responsibility, “oil will only bring us ruin'. The Venezuelan economy, though, plummeted under the Marxist influence of President Hugo Chavez, who failed to control the economy, corruption and crime, with poverty, rampant inflation, political and media suppression, and even electoral fraud, and under his successor, Nicolas Maduro, there has been no change as inflation is rampant at 59 per cent.
Then, on January 3, President Donald Trump signed off on ‘Operation Absolute Resolve', and the American military took into custody Maduro and his wife, Cilia Flores, now in an undisclosed location in the United States, on charges of narcoterrorism. This may not be legal, may or may not be about oil, or drugs, as it first appeared, but there is an even more likely scenario. It is almost certain that as China and America continue to ‘brawl’ over trade tariffs, patent violations and security, Venezuela has become the ‘meat in the sandwich'.
President Trump doesn’t want Venezuela’s oil, either for America, or its oil companies, but that would appease ‘big oil’ who have been smarting over Venezuela’s antics for the last 50 years. Instead, he wants to stop China getting it! Currently, China buys half of Venezuela’s oil production, and Trump wants to hit them where they would feel it as payback for China’s recent failure to complete a US Treasury purchase of silver.
Not having a ‘dog in the fight' offers an interesting view of how politics is conducted at the highest level, and we may cynically observe that nothing has changed since we were kids playing in the sandbox, has it? Hopefully, the Venezuelan people will benefit materially, as it’s an abomination that poverty exists in their lives despite living in a resource-rich country. There is unease that it is Maduro’s deputy, Delcy Rodriguez, who has assumed the presidency, and we must fervently hope she offers genuine change.
And just maybe... a few other despots and tyrants will sleep a little more uneasily now, and that couldn’t be a bad thing, could it?

Ray Petersen The writer is a media consultant