Venezuela, the country with largest oil reserves proven on the planet has been importing light oils since the year 2014, two years into Nicolas Maduro’s regime. This has been happening mainly because the country can no longer refine their own oil reserves to make their own gas and naphtha products. In the present year, these imports are taking an even uglier turn: Venezuela is buying oil from OPEC nations to cover their compromises with allies in the Caribbean region (Cuba specifically) before taking care of their own economic distress just 5 days away from a presidential election, and the deal has gone public.

A country that has everything has nothing right Now

You might be asking “why is this happening in this country?” A quick look at the map reveals that the country has one of the most prized locations in the South American continent. They have a rather extensive shoreline, deep forests, and Amazonian jungle as part of their geography. A country with such a rich natural environment could easily live off on tourism alone. But no one is visiting this country right now, and it all has to do with the massive mismanagement by the political movement known as “Chavismo” that has made Venezuela the most impoverished nation of the region and one of the poorest countries in the world.

The Origin of the Problems for Venezuela

The oil industry has literally been decimated since the year 2002 when then living president Hugo Chavez fired on a live TV show the brightest minds of the oil industry working on PDVSA, the state-run oil company that managed every single aspect of all oil operations in the country. Until that year the company had done the task with an efficiency that was second to none. It was not a surprise. The company only hired the best professionals in the country and cared about their continuous formation. But because they didn’t comply with Chavez wishes of handling the revenue of oil as he deemed fit they were fired on the spot.

According to Chavismo: “If it isn’t broken, destroy it!”

What followed was the slow dismantlement of a business model that had proven to be effective for the Caribbean nation even in times of crisis. It’s worth mentioning that thanks to their management policies the country survived one of the worst economic crises from 1994 to 1998 with the prices of oil as low as $15 per barrel. From 2002 and forward the only requisite to work in the oil industry was to have mid-level academic credentials and being fiercely loyal to the revolution above everything else. The face of submission was former ONU ambassador Rafael Ramirez who led PDVSA from 2004 to 2014 and in 2006 declared the company “Roja, rojita” (as in communist reddish)

The decimation Continued Until the Present Day

The downfall of the Venezuelan oil industry can be tracked easily with a Google search, but these days most of the inner dealings of PDVSA are kept in secret. Sadly for the current management, the leaks just keep happening, and this latest leak was just one in a long line of indiscretions made using Venezuela’s main source of income. Since Hugo Chavez was alive, he signed off collaboration deals with a lot of poor nations, but Cuba was favored above everyone else. It was only logical since Chavez’ newly minted father figure, Fidel Castro, was giving him all the hot tips to bring socialism to a country he had his eyes set on since the 60’s when he tried to invade it twice.

The Cost of Imposing Socialism

Under Maduro’s regime, with not a single competent advisor on his team to tell him what to do PDVSA has lost international litigations for lack of payments and these companies are collecting in the form of assets. The company has lost their capacity to produce or refine any type of oil production, and they are currently hitting the lowest mark in output registered on the last 33 years of republican history. With diminished resources, Maduro is still reluctant to accept any type of help and looks determined to keep their allies happy, even at the cost of the rage of their people. Over the next Sunday, a presidential election will be held in the country. Is very likely that Maduro will win, due to a rigged system put in place to secure his victory, but will the people take the farce and go with it as it pummels into further misery? Only time will tell.!