Denial, Delusion and Dragon Gas
The level of denial and delusion plaguing the public discourse of the signing of a term sheet at Miraflores in Caracas on August 25, 2018 reflects the grave economic threats to the existing structure of the energy economy and its potential blowback on the nation of Trinidad and Tobago that are now finally in the public domain. The core reality nobody mouthing off in public on the Dragon gas supply deal intends or wants to deal with is the ability of Venezuela to comply with the contract yet to be signed especially the ability to erect the pipeline infrastructure to deliver the gas to the border with T&T.
Reality 1: The Maduro regime is the reason why the Venezuelan national system of production has collapsed and when combined with printing money like if it is a comic strip the wind sown is now the whirlwind that is endemic hyperinflation which now has a life of its own. Maduro and his regime has showed no competence in taming the beast they unleashed on Venezuela Sovereign Bolivar, Petro and all. For no matter how many times he raises the minimum wage rate hyperinflation erodes buying power where you are working but barely staving off hunger and those who are not working are indigent.
Reality 2: The Chavista movement who marshalled 6 million votes for Maduro in the May 2018 election made it abundantly clear that this was the last dance and he must now deliver. The Chavista movement is mobilising and with no change for the better only for the worse will move on Maduro and he will make the expected response to unleash the FANB on the Chavistas triggering the civil war. The US and the oligarchs will exploit this Chavista revolution to move both warring factions and put in place the return to the Punto Fijo oligarchy which will deepen the civil war into the destruction of the social order where Venezuela as a nation, a geographic expression and a hegemonic State will cease to exist. The present reality of Nicaragua gives just a glimpse of what is next for Venezuela.
Reality 3: Maduro and his crew are now increasingly indicating to the Chavista Movement that in their desperation to hold on to power at all costs they are now practising, willing Chavista revisionists and apostates. In the signing ceremony of the term sheet for Dragon gas Maduro is reported as calling on Shell to invest in Venezuela’s oil and gas resources and an agreement was signed with Shell International on the Dragon gas August 25, 2018 occasion for Shell providing services to PDVSA in the oil industry. What must be noted is that there was just one report in the Maduro line Chavista news outlet on the Saturday 25 August 2018 event and in that report in Correo del Orinoco what Maduro said was not reported in detail at the event and there was no report on the contract signed between Shell and PDVSA at the event. Given the history of Shell, the proposed LNG plant in Sucre state utilising Mariscal Sucre gas and Chavez Maduro is now in deep apostasy hence the reason why the details of the Dragon gas supply infrastructure and the role of Shell remains a secret both in Venezuela and T&T. Why is Shell presently in Venezuela selling services to PDVSA in the oil industry in Monagas when every major player in the oil services industry both local and international have been burned by PDVSA? Given the drastic and destructive fall in oil production Shell is now indicating that it is now acting out a gambit in Venezuela. To what end?
Reality 4: PDVSA and Maduro simply does not have the money to erect the infrastructure to move Dragon gas to the border with T&T. This investment to move and sell just 150 million standard cubic feet of gas per day can be better invested in raising the daily oil production which is presently struggling to reach 1 million barrels per day on a sustainable basis. Is Shell then building the entire pipeline from the Dragon platform in Venezuelan waters to the Hibiscus platform in T&T waters? If so, WHY? If this is the reality, then it has to redound to the benefit of the bottom line of Shell and to do this there must be greater volumes of Venezuelan gas flowing to Atlantic to increase the volume of LNG Shell reaps to sell on the world market. Shell has publicly indicated its desire to be the hegemonic LNG trader on the world market and to do this it has to increase its output of LNG in the West. Shell can then be playing a long term gambit in Venezuela to get its hands on offshore gas for transport to T&T. Quite a risky gambit given the reality of Venezuela. The best outcome for Maduro is to transport Mariscal Sucre gas to Atlantic for processing to LNG and then sharing in the proceeds of its sale. Is this realisable? Can he sell this apostasy in the reality of Venezuela given his track record of dismal failure? Let him try for the reality will then be on the streets allowing us in T&T to finally get the full picture. The fundamental reality is if this gambit is realised then T&T becomes a colony of Venezuela with the Armada anchored in the Gulf to protect Venezuela’s national interests. This will then play into the strategy to marginalise a very close neighbour to the East which is considered in Chavista discourse a FOL for the US in its war on Venezuela. This Chavista position was illustrated in the manner the press core from T&T was treated at Miraflores during the signing ceremony. Simply another victory for Maduro who considers himself the premier foreign minister of the Chavista revolution and in the history of Venezuela. The carefully stage managed affair of 25 August 2018 was the message to the Chavistas that under his astute leadership the threat to the East was now manageable as they are begging with their tongues on the ground for our Chavista gas and they are in play so don’t worry about the details the revolution is in ascendency. That is Maduro’s gambit and T&T is being squeezed between a series of gambits that care nothing about our future wellbeing especially in light of the crisis at Petrotrin.
Will Shell purchase Rosneft’s interests in the other blocks of the Mariscal Sucre fields to facilitate the extraction of Venezuelan gas to be sent to Atlantic thereby sharing the proceeds with Maduro? Is Shell purchasing from PDVSA the full load of gas from Dragon shunting its share to Atlantic and selling the rest to NGC? The owner of the cricket gear controls the cricket game and can never be given out. We need answers!
Reality 5: The message from CORPOVEX to the exporters of T&T who fell for the three card hustle that is perpetuated on suppliers the world over is that no agreement is sacred and enforceable in Venezuela. Most of all this is a message for the T&T government who are speaking in public as if an agreement with Maduro’s Venezuela is inviolate and sacred when in fact it is expendable in the mad scramble for political survival. Cut up, rip off and stab in the back are the order of the day just listen to the farmers of Venezuela created by the Revolution who must buy seeds from Agropatria imported by Corpovex and the devastation unleashed on them by State bureaucratic capitalism that is now legal banditry. The state public transport buses are parked up in Venezuela for lack of tyres now you know why. Those exporters waiting for your outstanding 20% of the invoice amount just forget that for it is the tax levied for doing business with Maduro’s Venezuela. CORPOVEX is part of the Maduro dance where you dig holes to fill holes and those willing to stay in the dance are now getting less and less gravely intensifying the crisis. There are now reports that allege that Maduro is defaulting on his commitments to his very small group of allies as China and Russia whilst we rush into the Maduro dance where we are dancing alone with no music and the dancehall landlord with a bailiff and police ready to close down the dance, evict everybody and seize the premises. This willingness illustrates the depth of the crisis facing T&T presently.
Reality 6: There is a geopolitical price to pay for being a willing participant of the Maduro gas dance and one potent entry point for the backlash is the over USD 800 million bubble payment due on the Petrotrin debt in 2019. Closing down the refinery and placing a significant number of workers on the breadline can in this geopolitical game be insufficient raw meat for the dogs of war. For the dogs of war can demand the application of a deep austerity package to government expenditure in order to qualify for what we seek. Accept the terms, default on the debt or pay the debt when due such is the nature of the game. What then do we surrender in order to evade the hardball? The party now start! So much for being sovereign! Those who looking for a miracle from Maduro to offer a lifeline to the refinery for toeing the Maduro line remember Maduro don’t even have the daily oil production to satisfy his commitments to his closest allies and note carefully what has happened to the Isla refinery in Curacao under the control of PDVSA. On all sides denial and delusion!
“Manufacturers unpaid for Venezuelan exports-TTMA” Raphael John-Lall Trinidad & Tobago Guardian 25 August 2018