Venezuela is undergoing some of its worst
moments. This disaster is so huge, that what once was
one of the largest and most powerful oil companies in the world, PDVSA, is now practically bankrupt
and has more problems, including extracting oil. One second, the oil company with the largest
reserves in the world has problems extracting it? Yes, you heard that right, and we’ll tell
you all about it in this video… Folks, I think we all know it: Venezuela is
undergoing a true catastrophe, and not only an economic one. It is, above all, humanitarian. Such a huge disaster that in recent years
it has caused between 3 and 4 million Venezuelans to flee the country. That is, more than 1 in 10 inhabitants. And the truth is… we’re not surprised. See, according to the latest statistics, 87%
of the population, 87%, almost 9 out of every 10 Venezuelans, are poor… And, on top of that, most of Venezuela’s
population, 60%, isn’t only poor, they live in extreme poverty. But… not only that… Venezuela is burning down… According to data from the Venezuelan Social
Conflict Observatory, in 2017 almost 10,000 protests were registered throughout the country,
more than 27 a day. And what’s even worse: According to information from the former Attorney
General, Luisa Ortega, since 2015 the police, the National Guard, the Army and the different
intelligence services, have killed more than 8,000 people. Of course, most of them were regime opposers. Crisis, hunger, violence, repression… everything
indicates that Venezuela will soon undergo a refugee crisis of colossal dimensions. Because dear viewers, let’s be honest, things
aren’t looking good at all. See, for years, the “Bolivarian revolution”
of Chavez, Maduro and company had a great ally, and we’re not talking about Cuba,
or Russia or any other country, but about oil… the black gold that financed the “revolution”. For a long time, the huge income this raw
material brought financed all of the regime’s policies, and they didn’t care at all about
the consequences. That is to say, factories were closing? Foreign investment was fleeing the country? It didn’t matter because, folks, they had
oil dollars. However… all of that is about to end. Yes, Venezuela has a lot of oil. But… one thing is having oil and another
quite different thing is being able to exploit it. Did you know that PDVSA , the national oil
company, is practically about to collapse? Listen up. (THE FALL OF PDVSA Petroleum of Venezuela, PDVSA , was created
by government decree in 1976, to integrate all the oil assets the State had nationalized… This company soon became a world-class colossus. Do you know why? Well, among other things because this company
has the largest reserves on the planet… and, we mean large: there are more than 300 billion barrels of
oil certified, more than the reserves of Saudi Arabia, the Emirates, Russia or any other
oil power. Yes, it’s true, we’ve said it here, Venezuelan
oil doesn’t have the highest quality, but… it doesn’t matter. We’re talking about a huge amount of resources,
almost 20% of all known world reserves. Well, the fact is that this company, PDVSA
, peaked in production in 1998, a year before Hugo Chávez came to power, at which time
PDVSA was extracting 3 and a half million barrels per day. Since then, things have changed a lot. By the year of Hugo Chávez’sdeath in 2013,
production had decreased by 1 million barrels per day… One moment, one million less? Could it be that Hugo Chávez’s Bolivarian
government didn’t like oil? Could it be part of a twisted plan to diversify
the Venezuelan economy? Well… no. Quite
the opposite. Hugo Chávez wanted to increase production
to 5 million barrels. The problem was that, they simply weren’t
able to do it. But if you think that the commander’s results
were bad, you haven’t seen anything yet… Because since Nicolás Maduro came to power,
production has sunk to 1.8 million barrels. That means that, while countries like the
United States have doubled their production, Venezuela produces half as much oil as when
the revolution began. Very successful. And if you think that’s the worst of it,
think again. No, he future looks a lot worse. Now, at this point, you may be wondering,
what the hell is going on with PDVSA ? (THE KEYS OF A DISASTER FORETOLD) The PDVSA’s history, dear viewers, has been
the story of a disaster foretold. The best example is that of the Paraguaná
refining complex, which consists of 3 crude oil refineries and is one of the 3 largest
complexes of its kind on the entire planet. For years, it was Venezuela’s industrial
pride, the Crown jewel. However, today… it barely operates at 15%
capacity… and all kinds of accidents tend to happen, why? (“There’s no maintenance. They sucked everything they could from PDVSA
without investing, there’s nothing left to squeeze” Pablo Céspedes, plant operator.) And this isn’t some extraordinary case. At the end of October, also in the Paraguaná
refining complex, the Amuay refinery spilled over 200,000 gallons of gasoline into the
bay; a few days later, another refinery in the
complex, the Cardon refinery suffered a fire that the firemen could barely contain, because
they didn’t even have foam to fight the flames. And so on and so on. Because the truth is that most of the oil
company’s facilities are in terrible condition. But… How do you think they reached this point? Well, you see, the Chavez government always
saw PDVSA as a kind of dairy cow from which they could get all the resources they needed
for their “Bolivarian revolution”… the problem is that the oil industry requires
lots of investments, investments that the Venezuelan government simply didn’t want
to make. Even with the fact that it indebted PDVSA
to the brim. By the way, do you know how indebted this
company is today? Listen to this… we’re not talking about
1 or 5, but 90 billion dollars. A fortune so big that Venezuela could have
even bought multinationals like Goldman Sachs, Nike or Siemens. Now that’s a lot of debt! But… do you think that’s all? Not even close. They also used the company to plug-in, place
and hire thousands and thousands of supporters, friends and family members… from which PDVSA
lost even more resources. And if that weren’t enough, the Chavez regime
also placed unskilled and inexperienced personnel in management positions, while dismissing
and driving away thousands and thousands of experienced employees because of their political
beliefs. Yes, this is how PDVSA has run out of money
and out of human resources.. Now we can understand why oil production is
dropping. Of course, the consequences of all this are…
terrible for the country. (THE CONSEQUENCES) Oil is essential for the Venezuelan economy… especially because there’s no other industry
left standing. Their dependence is so great that oil generates
95% of all foreign currency profits, in dollars, for example. And these currencies, my friends, are what
Venezuela needs to be able to import food, medicine, gasoline – yes, today Venezuela
has to import gasoline – or anything else. But of course… as oil production keeps plummeting…
the country has to import fewer things. And you know what? Since Venezuela is literally producing nothing
and has to import everything, the dwindling oil money is no longer enough to pay all the
bills. But… of course, as you all know, when you
spend more money than you make… money goes away… and that’s precisely what’s happening
to Venezuela, which according to some calculations, barely has 10 billion dollars in foreign reserves,
which is their lowest number in 40 years.. This means… that when the money is gone,
they won’t be able to import anything else than what they can buy with what they make
from the oil… which is decreasing. Do you see the problem? Until now, as we saw here on VISUALPOLITIK,
Nicolás Maduro’s government has tried to buy time by resorting to international markets
to issue debt… at scandalous rates, sometimes as high as 40%. Obviously, issuing debts with implicit rates,
interests of 40% can only mean future ruin. And in any case, that is actually no longer
a possibility. In fact, both the Venezuelan government and
PDVSA are incurring defaults, that is, they aren’t paying their debts. (“S&P downgrades seven sovereign Venezuelan
bonds to the default level” Bank and Business) Another route they’ve attempted, was that
of the Chinese rescue… and the Chinese answered and placed more than 23 billion dollars in
loans on the table… But… everything has a limit, and they are
no longer willing to continue giving more money for nothing. Check this out. ( “The Chinese oil company Sinopec sues PDVSA
for unpaid debts” OilPrice.) The situation, my friends, is so desperate
that the Cuban government has decided to seize the 49% that PDVSA held in a Cuban refinery
as compensation for unpaid debts. You heard that right, Not even Cuba trusts the Maduro regime! And, it was all of this that led to the latest
Chavista event: the Petro. THE VENEZUELAN CRYPTOCURRENCY As we’ve seen, with every day that passes
the Venezuelan government has less access to foreign currency… which is obviously
a huge problem… because without foreign currency they can’t import. But, based on this problem, an idea came up: Cryptocurrency is in fashion, so why not launch
their own cryptocurrency?: The Petro. Of course… the petro is a very particular currency… among other things,
because it’s controlled by Maduro’s government. Under these conditions, I ask you a question, Would you be willing to invest a single euro,
a single dollar in this new cryptocurrency? Or in other words, would you put your money
in the hands of the Venezuelan government? I know I wouldn’t… not even a penny. And precisely because no one in their right
mind would do such a thing, the Venezuelan government has had to back this particular
cryptocurrency with oil. That is, each Petro will be guaranteed by
a barrel of oil from the Venezuelan oil reserves, reserves that, of course, are underground. In this way, the petro’s value is apparently
linked to the value of this raw material. Does that sound better?… well… just a
moment, because we cannot forget a detail, a very, very important detail: the oil reserves, my friends, are also under
the control of the government. And I wonder, do you really think that this
government is going to exploit those reserves? And even if they did, do you think they’d
really back the petro? And what about the support rate? Wouldn’t the resources generated be spent? Wouldn’t they impose restrictions or regulations
that would benefit them? And above all, why the hell take the risk
of investing in petros? By the way, an important point, the petro
isn’t convertible. That is to say, even though it is supposedly
backed by oil barrels, you can never exchange it for the barrel or for any title that proves
a right over those barrels. (“The petro is a cryptocurrency that isn’t
crypto, that is backed by reserves that aren’t reserves. That can only be monetized with a production
that is collapsing and issued by a government that is in default and has no dollars.” Francisco Monaldi, professor at the Rice University’s
Baker Institute in Houston) Folks, the petro doesn’t seem to be anything
more than a last ditch attempt to gain time and try to obtain the greatest possible number
of dollars by taking advantage of the popularity of cryptocurrencies, and perhaps of capital
laundering… because, who would put the dollars on the table? The fact is that if this crypto doesn’t
work… and that looks like the most plausible scenario… Maduro’s regime will only have three options: first, accept some kind of internal revolt
and leave power one way or another, which seems very difficult; second, use an even tougher hand and condemn
Venezuela to an even greater humanitarian disaster; or third, try to get the Chinese and Russians
to buy the country’s national resources in mass and by all means, such as refineries,
oil and many other raw materials. That is to say, become a kind of colony by
selling at a loss each and every one of the Crown jewels so that the regime’s elite
can continue to enjoy their standard of living. Dear viewers, Nicolás Maduro and company
are still in power, and it hardly seems like Venezuela will have a better future. But now… it’s your turn… Would you be willing to exchange your money
for petros? Leave your answer in the comments and in this
survey as well. I really hope you enjoyed this video, please
hit like if you did and don’t forget to subscribe to our channel for brand new videos
every Monday and Thursday. Also, don’t forget to check out our friends
at the Reconsider Media Podcast – they provided the vocals in this episode that were not mine! And as always, thanks for watching!