(⊙_⊙)
A daily article on Global Human & Geography
WeChat public account: Earth Knowledge Bureau
NO.2417 - "Poor" Venezuela
Author: Thornless crowned dragon
Proofreader: Guo Hanying / Editor: Guo Guo
Kissinger famously said, "Whoever controls oil controls the whole world." When it comes to oil, many people think of the rich countries of the Middle East, but the country with the largest proven oil reserves in the world is Venezuela.
In terms of proven oil reserves, Venezuela is the first in the world▼
Unlike the Arab countries in the Middle East that only have oil, Venezuela is not only rich in oil and natural gas reserves, it is a founding member of OPEC's Organization of the Petroleum Exporting Countries, but also rich in iron ore, bauxite, gold, coal, nickel, diamond and other minerals and world-class beauty pageants. Its arable land area is more than 30 million hectares, and it is rich in high value-added crops such as coffee and cocoa.
Venezuela, a resource-gifted player
(Photo: OEC) ▼
In addition to sitting on mineral resources, it is also rich in beauty
(Photo: OneImage) ▼
Venezuela is like a rich second generation born with a golden spoon, whether it is developing agriculture, oil and gas, mining, or using its own advantages to develop industry, any skill tree can develop well.
However, the largest refugee flow in recent years has occurred in Venezuela. It has been named one of the "most miserable" countries in the world for several years in a row. In 2020, Venezuela had the highest inflation rate in the world at 3,713%. According to the World Bank, Venezuela's per capita GDP in 2021 was only $1,686, far below the world average.
Two extremes: more oil, more refugees
(Photo: Shutterstock)
Venezuela is now nicknamed the beggar sitting on the mountain of gold.
Why did this South American country get to this point? ▼
Rich reserves but poor oil quality
Venezuela's rise and fall are no accident. Venezuela has eight sedimentary basins with a total area of 347,800 square kilometers, and a maritime continental shelf of 100,000 square kilometers, accounting for 38% of Venezuela's total area.
Among them, five onshore basins have produced oil and gas, mainly in the Maracaibo basin, the eastern Venezuela basin and the Barinas-Apree basin. The degree of oil and gas exploration in these basins is relatively high, and there are still hundreds of millions of tons of oil fields discovered in the mid-to-late 80s of the 20th century, which has quite high exploration potential.
The main oil and gas producers are these three basins▼
The Eastern Venezuela Basin is the largest sedimentary basin in Venezuela, and the Orinoco Heavy Oil Belt, located in the southern part of the basin, is a wide area of oil-producing areas with contiguous oil-bearing belts, and is one of the largest heavy oil accumulation areas in the world.
Orinoco Heavy Oil Belt▼
The amount of Venezuelan oil is large, but the quality is not so good.
Most of the oil produced by Venezuela is heavy oil, even ultra-heavy oil. Heavy oil is almost difficult to flow at room temperature, and it is often necessary to inject hot water, steam or add catalysts to increase its fluidity before reaching the ground.
Unlike the conventional impression of oil, heavy oil is very viscous
(Photo: OneImage) ▼
Moreover, whether it is emulsified or diluted, this heavy oil does not have too high value in the world oil market. It needs to be treated by coking, cracking, hydrogenation and other modification processes. The equipment and processes for retrofitting are quite expensive.
In addition, the storage and transportation of heavy oil also needs to be heated, otherwise it will harden quickly and block the pipeline, so its transportation cost will also be very high. Due to poor oil products, Venezuela also needs to import light oil mixed with refined heavy oil to improve oil products for export.
In general, heavy oil is difficult to recover, difficult to use, and difficult to process
(Heavy crude oil processing plant Photo: OneImage)▼
Statistics show that the cost of extracting a barrel of crude oil in Venezuela is about $23.5, while the cost of Saudi Arabia, the United Arab Emirates and Kuwait is less than $10, and the cost of mining in Russia is about $17.
On the whole, Venezuela's heavy oil can be compared to Canada's oil sands, and of course it can make money when oil prices are high, and although the income per barrel is not as high as the light oil of other oil-producing countries, it is better than the quantity, and it can still make small profits and sell more. But at low oil prices, profits can be sharply reduced, and they may even lose money.
The famous Athabasca oil sands is located in Alberta, Canada
There are even opinions
Venezuela is Alberta's biggest rival
(Photo: Shutterstock)
In fact, Venezuela has made a lot of money in several cycles of sharp oil prices in history. Even during the period of military dictatorship and political turmoil from 1952 to 1958, Venezuela's GDP continued to rise every year, thanks to high oil prices. At this time, its standard of living was better than most countries in Europe, and its per capita GDP even ranked fourth in the world.
This era can be called the golden period of Venezuela's development▼
In the 1970s, when the fourth Middle East war broke out, Saudi Arabia and other Arab countries collectively reduced the production of embargoed oil to the Western world in order to attack Israel and its supporters, resulting in a global oil shortage and a sharp rise in international oil prices.
Venezuela was a vibrant and largely stable democracy, and its people were happiest at their time, with ordinary middle-class people eating steaks and driving Cadillacs and flying frequently to Miami and Paris for shopping.
Venezuela, which seized the opportunity to take advantage of its own oil resources
I enjoyed the joy of economic freedom early
(There is a "American retro" flavor Photo: Facebook) ▼
From 2000 to 2008, as international oil prices soared, Venezuela became one of the countries with the best social welfare benefits in the world, even compared with the oil exporters with a large number of tycoons. In 2013, Venezuela was also named the happiest country in the world.
Universal welfare policy and single industrial structure
In the past, Venezuela was mainly agricultural, but since the discovery of oil in Venezuela in 1920, it has changed from exporting agricultural products to exporting oil. With huge oil reserves, Venezuela has had a good time.
Color map produced by Citibank in Venezuela in the 1950s
Conspicuous oil recovery elements can be seen
(图:Miguel Tinker Salas)▼
But in the mid-1980s, Middle Eastern oil producers increased production, causing oil prices to plummet, causing an economic crisis and social unrest in Venezuela. At this time, the corruption of the option aristocracy is serious, further aggravating the gap between the rich and the poor and causing social tears.
At this time, a young military officer from the lower ranks, Hugo Rafael Chávez Frías, raised the banner of the uprising and vowed to overthrow the corrupt government. In 1999, Chávez won the presidential election under the slogan of fighting corruption.
Chávez: Follow me, there is meat to eat!
(Photo: OneImage) ▼
Since then, with the sharp rise in oil prices, Chávez has fulfilled his promise of high welfare for the people, education and medical housing are all free, and refueling costs almost nothing, turning Venezuela into a utopia with high welfare for all.
Chávez loves to read Uruguayan writer Devado Galeano's "The Cut Blood Vessels of Latin America", in which he says: "The essence of the international division of labor advocated by European and American countries is to divide suffering among developing countries and leave happiness to developed countries." ”
This book analyzes the history of colonial blood and tears in Latin America for nearly a century
There are also Chinese editions, which are well worth reading
(Latin American Memorial in São Paulo, Brazil Photo: wiki) ▼
As a result, he fundamentally denied European and American multinationals control over oil. Chávez's social reforms rapidly transformed the free-market economy adopted by the old government into a quasi-socialist system of income redistribution.
During his administration, he completely subverted the original tradition of pro-American foreign policy in foreign relations, gradually decoupled from Europe and the United States, expelled all European and American oil companies, and announced complete nationalization.
At this time, Chávez may still be dreaming
Continuation of Venezuela's utopian era
(Photo: wiki) ▼
The early years of Chávez's reign benefited from high oil prices and rapid economic growth. However, it turns out that eggs cannot be put in one basket, there is no development of other industries to hedge risks, and the results of industries that rely only on oil exports are too monolithic. The factors affecting oil prices are many, and political, economic, inventory, climate, technology and other factors may lead to sharp changes in oil prices.
Good luck doesn't happen often
The economic chaos that ushered in the late Chávez administration was no coincidence
(Chávez's opponents organize strikes Photo: Flickr)
In 2014, the United States made a breakthrough in shale oil technology and began to cooperate with Saudi Arabia to increase production to suppress global oil prices. Oil prices fell from $150 to $30, and the collapse led to the complete collapse of Venezuela's national economy.
It was supposed to be fed on oil
As a result, I couldn't eat because of oil▼
After Chávez's death in early 2013, Nicolas Maduro, under the banner of "son of Chávez," won the election. Compared to the tried and tested strongman Chávez, Maduro appears inexperienced. Because he did not understand international finance, he only knew how to give subsidies and houses to ordinary people when he had money. When oil prices fall and there is suddenly no money, there is no way to deal with it.
Said "son of Chávez"
But it seems that he has not learned the slightest bit of Chávez's experience and lessons
(Photo: wiki) ▼
Venezuelans have lived a life of ultra-high welfare for more than a decade, at a time when Venezuela's urbanization rate is as high as 90%, and the country's agriculture is basically abandoned. The government has no dollars to import, and supermarket shelves are often empty. Due to the maintenance of the original large-scale subsidies, the fiscal gap has widened, and Maduro can only respond by printing money, resulting in rapid inflation of the national currency.
Everyone is money, but my money is not "valuable"
(Photo: Shutterstock)
After that, Maduro imposed prices, announcing fixed prices for daily necessities such as water, juice, soap, toilet paper, diapers, etc. As soon as the news came out, these goods disappeared from the shelves, because almost all the goods had to be imported, and the inflation caused by excessive currency distribution caused the selling price to be lower than the cost.
▼
Visit a supermarket and there are more people than goods
(Photo: Shutterstock)
Helplessly, Maduro was forced to impose quotas and purchase restrictions, but to little effect. There were large-scale vandalism and riots among the people.
In 2019, Venezuela's inflation rate reached a terrifying level, at the beginning of the year an egg only 100 bolivars, but at the end of the year an egg cost 1 million bolivars, the people's wealth was diluted, inefficient state-owned enterprises became zombies, talents left one after another, fled as refugees to other countries.
Vast numbers of Venezuelan refugees: What is home?
(Photo: HIU)▼
U.S. sanctions
At the same time, poverty in Venezuela has a lot to do with U.S. sanctions. Because of its location in Latin America, but at every turn confrontation with the United States, Venezuela's oil exports have been subject to US sanctions.
"Whether your oil can be sold or not depends on my face"
(Pinched Photo: wiki) ▼
As a result, countries in South America, with the exception of Cuba, dare not trade with it. If petroleum products are sold to other continents, high transportation costs will further erode their meagre profits.
Since 2017, US economic and financial sanctions against Venezuela have been in place, and even military threats have been raised several times. It faces a similar situation to Iraq in the past, although it is an oil-producing country, but it has no sales channels. As a result, Venezuelan government revenues have plummeted, and national public services have been paralyzed almost entirely due to insufficient funding.
This time, I really sat on the oil gold mountain and cried▼
Since the United States imposed sanctions on Venezuelan oil companies, Venezuelan crude oil production has plummeted. Oil sanctions have paralyzed Venezuela's economy and worsened the quality of life of its people. More than a third of Venezuela's population is already in a food crisis, water is insecure, and the average household has only a few hours a week to supply running water.
Oil resources that once made the country proud
Today, it cannot be exchanged for enough water and food for its citizens
(Photo: Shutterstock)
It is also subject to US sanctions in terms of imports, and the import of food and drugs is not guaranteed, and some patients suffering from serious diseases have lost their lives because they cannot obtain imported drugs.
If you are sick but have no medicine to eat, in the end it is the people who suffer
(Photo: Shutterstock)
Magical realism was born in Latin America as an art form, and its works reflect the real life of Latin American countries in a magical and magical way.
South America has many good magical realist painters
For example, Frida Kahlo in Mexico
(Photo: Wikiart)
"In the background environment of highly detailed reality, embedded with strange and incredible things", "Magical and grotesque characters and plots, as well as various supernatural phenomena are inserted into the narrative and description that reflect reality, there are both bizarre fantasy artistic conceptions and realistic plots and scenes, people and ghosts are indistinguishable, and illusions and reality are mixed".
Perhaps because it is too close to the United States and too far from heaven, the plot of magical realism is really playing out again and again in Latin America.
Isn't that magical (Image: Flickr).
As Chávez loves to read in The Cut Blood Vessels of Latin America: "Silver becomes a cause of grief and festivity, silver causes blood and wine to gush, silver ignites greed, silver indulges in profligacy and adventure." This quote describes the world's largest silver mine in Potosi, Bolivia.
(Sculpture of the Potosi silver mine circa 1750)
(Photo: WellcomeCollection)
Years later, history is like a wheel, and this saying applies to Venezuelan oil today.
Resources:
[1] Olivares, Francisco. Best and brightest for export. El Universal. September 13, 2014 . The Bolivarian diaspora is a reversal of fortune on a massive scale
[2] Hugo Chavez is Scaring Away Talent. Newsweek. June 30, 2009. The Bolivarian diaspora is a reversal of fortune on a massive scale
[3] Ten percent of Venezuelans are taking steps for emigrating. El Universal. August 16, 2014 [4]Situation Response forVenezuelans. r4v.info.
[5] Wyss, Jim. A nation is vanishing: Has Venezuela lost almost 20 percent of its population?. The Miami Herald. August 13, 2019
[6] Number of refugees and migrants from Venezuela reaches 3 million. UNHCR. UNHCR, IOM. November 8, 2018
[7] Thanks to the bad policies of the Bolivarian government, more than 4 million Venezuelans have left the country (survey). The sideburn. January 19, 2018
[8] Board, Editorial. Latin-America's worst-ever refugee crisis: Venezuelans. The Washington Post. February 23, 2018
[9] Wunder 2003，page 130.
[10] Constitution of 1858. Miguel de Cervantes Virtual Library. I. 1.
[11] Constitution of 1864. Miguel de Cervantes Virtual Library. I. 1.
*The content of this article is provided by the author and does not represent the position of the Earth Knowledge Bureau
Cover: OneImage.com
END