If Venezuela’s PDVSA is the goose that lays the golden eggs which enable Hugo Chavez to hold on to power, that goose may be on life support:
PDVSA is tight with financial information that other companies usually provide. But a study of official announcements, company figures and outside analyses suggests it is bleeding money and racking up huge debt, even as international oil prices are at record highs… Figures from the International Energy Agency research center show an even bigger loss last year, $7.9 billion. The difference comes from widely divergent estimates of PDVSA’s production: The IEA calculates that Venezuela produces about 2.4 million barrels of oil a day, about a quarter less than PDVSA says it is pumping out. Most independent experts use IEA figures, which say production has dropped by 800,000 barrels a day since 1997. A continued fall means Chavez would have to cut back on social programs at home and on billions of dollars in charity to foreign governments.
If the United States designates Venezuela as a state sponsor of terrorism, a step now under consideration, it will reduce that nation’s oil sales significantly, and quickly. And given the Chavez regime’s ties to the FARC, such a designation would be well justified.
