Photo Jonathan Blair

Wednesday, October 13, 2010

Killing the strategic partnership with Venezuela

So, PDVSA, Venezuela's oil company, is not paying its part for the joint refinery it was supposed to be building with Petrobras in Pernambuco. That refinery project was the linchpin of the "strategic partnership" between the two countries that was launched with much fanfare five years ago. With the linchpin gone, not much is left and all the rhetoric in the world simply will not compensate for the lack of substance in the realtionship between the two countries. Chavez' poor management of "his" oil company must shoulder the blame. But does it?

Because the whole thing gets better: PDVSA, like all such large companies, often borrows to invest in such large projects. So the company, meaning Chavez, went to the BNDES, Brazil's development bank, and was turned down TWICE!

Now the BNDES is well-managed and all in all, massively successful financially. But it has always been used for political purposes and its current president, Luciano Coutinho, is very, very, very close to Lula and the PT. No doubt, had the King wanted it, the money would have flown. So the King did not...