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Jose Toro Hardi: VATSA could recover with eight years of investment in Agenda



Photo: Jose Felik Lara

Photo: Jose Felik Lara

Ivonne Aiala Perdomo

Jose Toro HardiAn economist and well-known hydrocarbon specialist, has been integrated with the other 80 experts from oil and basic and strategic industries, a team that is in charge of analyzing the industry's revitalization guidelines in the national plane.

From this scenario, with full knowledge of the most serious problems affecting the country's most important industry, it is estimated that this requires a very significant investment of private capital in order to save the sector that has fallen "into a big-scale disaster"

What is the amount of investment needed to make the national oil industry more productive?
Very serious calculations have found that between $ 25 billion and $ 30 billion each year over the course of eight years between investments and costs, the production level of 20 years ago, when it was 3 million 500 thousand barrels, would be restored. oil per day. Now we are living a catastrophe of great proportions. Only by rescuing the industry can we move forward.

Oil revenues are vital, accounting for 96% of all dollars entering the country, of which 70% comes from operations with the United States. These revenues are usually the result of two variables: how much oil is produced and what the price is being sold. Pretending to balance public spending on the basis of prices, this is impossible because it would require that they be close to $ 250 per barrel. Pretending to be balancing on the basis of production is a task that would last for many years. In the accelerated growth scenario, Venezuela would need about five years to reach production of 2.5 million barrels per day. To achieve this, some 7,470 closed wells (category 2) should be reactivated, 3,803 new wells will be drilled, 2,700 reconstructed works, injected to 5209 wells and increase the number of operational wells from 27 to now.

By projecting these figures, we should be able to reach the production of 3.5 million b / d in 1998, which we had in 1998. Almost a decade to regain the level of production we had 20 years ago. This tells us about the level of mass destruction that our oil industry has undergone.

It does not seem to have financial muscles.

It is precisely the fact that the Venezuelan state has no means to confront this incredible task. If they had it, its priority should be the attention of the humanitarian crisis and a great effort to tackle the problems of education, health, security and justice that plague the ordinary Venezuelan population, so that it will be the private sector, both national and foreign, a vital role in recovery our oil industry. This is because the lifespan of the oil as an energy agent is shortened. The main predictors in the world estimate that the share of oil in the energy matrix will significantly decrease. It is important to note that the International Energy Agency warns that global demand for oil will continue to rise for another two decades, but that by 2040, it will gradually give way to other non-polluting energy sources. We have, therefore, a "window of opportunity" that forces us to immediately react to the risk that our hydrocarbon reserves will remain forever in the underworld.

Given that neither price nor volume can solve the problem of oil revenues, in the short term, the variable that can most affect the recovery of the economy is the multiplier effect of large investments needed not only in oil, but in other sectors of the economy.

All countries that have oil are also aware of the issues of the "window of opportunity". Everyone is trying to attract investment. Without sacrificing sovereignty, we must apply an oil policy that allows us to be competitive. This is one of the goals of the Earth's Plans on Oil.

What are the conditions for increasing the interest of transnational?
In order to attract the private capital that is needed, a much more bold opening of oil will be required than the previous one (the program designed during the second chairmanship of Carlos Andrés Perez, 90). The current Law on Hydrocarbon provides that companies participating in the oil sector must contribute 50% to the income tax and 30% in the tantyum. So you can not attract new investors, it's unattractive. All countries that have oil know about the "window of opportunity". Everyone is trying to attract investment. Without sacrificing sovereignty, we must apply an oil policy that allows us to be competitive.

This is one of the goals of the state plan in oil matters, we have to be competitive with other countries that also require the participation of new and more capital in their oil industry, offering much better conditions.

It is also essential to present a reliable, transparent and solid scenario that separates the concerns of interested companies. This means that each contract is concluded through a clear tender process. The award of a contract to the finger must be eliminated. It is important to emphasize that we do not take into account exclusions, that everyone can participate in technical capacities. All legally signed contracts will be respected, need to be added. The first thing to understand is that without political change there is no possibility of introducing the necessary measures. We have to move from the control economy to the incentive economy.

The only thing that the Venezuelan economy will recover is a huge investment in all sectors, when we talk about the multiplier effect of the investment, because if the funds are injected into the oil industry, the construction industry is activated, if that happens, it increases the trade and service.

Is there a possibility that, if the necessary changes take place, the recovery of the industry comes earlier than is expected?
It all depends on the size of the investments that can be achieved and the quality of the financial leverage. At the moment, conditions are being prepared at the very least. There were important contacts at the diplomatic level. We talked to the representatives of Russia and China about contracts, and there are some things that are very clear. There are two issues to be addressed: investments and new technologies. We have outdated technology that needs to be updated, which must be taken care of.

There is concern about the magnitude of the darkness that has covered the whole country for five days in a row in the oil industry.
The outlook is catastrophic, data is already being rolled out so that the decline in oil production these days is about 460,000 barrels per day, considering that, according to Opec's tertiary sources, this information from the six largest companies and the world's hardest in the hydrocarbon market, amounted to 1 million 08 barrels per day at the end of February, that is, before decay, then pumping in the dark days of March fell to 540 thousand barrels per day. If, apart from McKuilling Partners Inc., based in the United States, which provided the Pdvsi with four contracted tankers, it joined the German shipping operator Bernhard Schulte Shipmanagement (BSM) in the withdrawal of maritime services. From oil to oil company, remember that this company manages a fleet of 15 VATSA ships and has worked in Venezuela for almost 25 years; that the Indian refinery, Reliance Industries Limited, has suspended the purchase of crude oil from the country. Freezing of the Pdvs account in the Russian Gazprombank bank and so many other announcements motivated by Donald Trump's sanctions by Nicolas Maduro, we have that when he says that if they do not do business with the United States, he can put oil elsewhere, he does not know what he says, with the announcement of reliance and the situation Citgo – that has processed part of our heavy crude oil, there are no refineries on the planet that accept Venezuelan oil. The situation is getting tougher, and the world is much smaller.

Is it true that April is much darker than March?
Without a doubt, April will be a black month as the economy will be hit directly because 70% of the currencies that entered as a result of negotiations with the United States will no longer enter. and other aspects that are mentioned. The government is talking about signing contracts for new deals with China, Russia and other allies, but the truth is that investments in contracted jobs are not being realized. The oil industry got a decisive blow with the announcement given by McKuilling Partners Inc. and Bernhard Schulte Shipmanagement (BSM), as it also undermines the ability of Petroleos de Venezuela to supply raw global markets.

It is very difficult to recognize, but since PDVSA is the company that has most contributed to the improvement of Venezuelans, it is now the one that contributes most to its development. Its cash flow deficit is so monumental that the Central Bank of Venezuela has to issue inorganic money to help it. As there is no production in the country, everything is redirected to the purchase of dollars and everything is imported. Almost 90% of the increase in monetary liquidity, money on the street corresponds to the financing of the BCV by public companies, but 80% of it corresponds to PDVSA, that is, Venezuelans make inorganic money generated by the Central Bank with its small machine, which does not exist , triggers inflation. The consequence of inorganic money is that prices are rising. People who have more money are trying to get more goods and services. Demand increases, and thus costs

2019-03-16

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