Turbulence in markets has hit the oil price too. Not so long ago the Brent near futures contract was close to $130pb, now it has subsided to $108pb. West Texas, which is suffering from a congestion problem in Oklahoma is way lower still. For Venezuela the lower price is a problem. Government relies on oil for a large chunk of its budget and the Bolivarian Revolution is already unaffordable with a budget deficit of over 5% of GDP and foreign debt heading for the $100bn mark. Inflation is entrenched at well above 20%. Of course, in the long term Vennie will just muddle along as it has for years. Oil has always been the saviour and that is unlikely to change even though the national oil company PDVSA is so badly run. The country sits on gigantic deposits of heavy oil in the Orinoco Belt. Venezuela says its reserves now exceed Saudi Arabia's. This is an exaggeration but there's surely plenty of stuff in the ground. A lot of foreign expertise and capital will be needed to develop these but Hugo Chavez is unlikely to open the doors. Now, however, he is ill and may not last in power as long as he hoped (i.e. for another decade or so!). See my article on Venezuela here:
http://www.businessday.co.za/Articles/Content.aspx?id=150148 The QSL is from Radio Anzoategui, heard on AM 1210 in 1991 during a dxpedition to remote Copperton in the Northern Cape province with Vashek Korinek. Anzoategui is one of the states that borders on the Orinoco Belt.
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