Connect with us

Latest

Economy

Russia

Russia’s agriculture sector continues to BOOM in face of Western sanctions

A major economic shift unremarked by the West, while multiple production dimensions come on line.

Published

on

1,622 Views

Much is written about the vast strides Russia has made in matters agricultural. The many different Cheese types that were previously imported are now largely produced in Russia. The gains are across the edible board, from poultry, fish and pork through to fruits, vegetable and grains. Grains specifically have shown strong and steady growth due to increased investment as well as using the latest management and production technologies.

For example, wheat harvests in Russia are now not only satisfying Russia’s national demand, but also form a significant and steadily increasing part of the country’s global exports. In Soviet times, world traders and specs eagerly awaited the announcement of the wheat harvest or its forecast potential. To those punters on the world’s futures exchanges it usually signaled how much the USSR will BUY over the coming year to meet its internal needs, as they didn’t ever SELL. That has radically changed, much like the country, its direction, politics, beliefs, abilities and its people.

One small but glaring opportunity gap in this growth curve has only recently come to active investor attention, and is finding real support from the financial institutions in Russia. This gap is in the range of products and ingredients derived through the deeper processing of raw materials, in this case grains. These little known, not off-the-shelf products are an essential part of the processing and manufacture of almost all foods and beverages, and a number of pharmaceutical products, even textiles.

These ingredients are exclusively obtained through deep processing and treatment of wheat and other grains. They include dry wheat gluten, modified starches, glucose-fructose syrup, molasses, and feed mixtures (as a by-product of the technological process).

These products are widely used for not only food production, but also pulp/paper manufacturing, in low-alcohol and beverage industries, pharmaceuticals, cosmetics, animal husbandry and in several other industrial sectors. The demand for these products both domestically and in the global markets is strong and continually growing.

In general, only 10-12% of such ingredients are produced in Russia while 88-90% must still be imported. The irony of the situation is that one of the major raw materials used to produce these products is wheat, which has been steadily growing to large surpluses these past several years. Today several multinational firms involved in agricultural processing like Cargill, Archer Daniels, L. Dreyfus and several Asian groups have already started either through M&A or through investing in their own processing to begin filling this void inside Russia.

Russian agricultural companies have been quite active too, as deep processing of grain results in products with far higher economic benefit than simply selling raw material or milled flour/starch. Establishing such deep processing projects also addresses the challenge of partial or even complete import substitution. These valuable and increasingly demanded ingredients can easily use even extremely low grades of wheat as perfectly suitable raw materials, which without deep processing are close to valueless.

One example is a start-up in the Kursk region, which is part of the famously fertile “black earth” area of Russia. The company, a 100% Russian start-up called OOO “InnPromBioTec” is a group of young and experienced professionals in the food processing industry. Their expertise has ranged from implementing and successfully commercializing production of food ranging from low-fat mayonnaise to fermented “kvass” (a traditional Russian grain based beverage), as well as oil from various grains. Today they are in the process of establishing a technologically cutting-edge deep wheat processing facility in the middle of this grain rich region.

With sanctions in place, while they officially do not impinge of food production or foodstuffs, they do and have affected the attitudes of traditional investors in the USA and the EU, not to mention the non-Russian banks. There is a palpable fear among the potential and logical investment partners in both the EU and US not to bend, therefore dismissing profit, rather than risk forging ahead and perhaps facing politically unstable censure from their own countries.

This Kursk based company therefore shifted its focus to the Far East, specifically China, Japan, Thailand, Korea and possibly India. This, while the most cost effective points of export realization and ready markets demanding such deep processed products are next door in Europe, who also import, albeit to a lesser degree, to meet their production requirements.

From an economic perspective, projects such as InnPromBioTec’s are attractive, especially in today’s markets. The capital required for such technologically intensive production is about 150 million Euro equivalent to process 250,000 tons per annum. Russian banks are willing and prepared to lend fully 80% of the needed capital as project financing, and the government affords a number of easements and incentives to make such projects as riskless and transparent as possible as they are considered a national priority, and are therefore quite secure and problem free.

Projects like this are not immediately operational, they must be planned as well as built from scratch, and this has been the bane of long term investing in Russia. Local investors want huge returns on their money and they want it almost immediately, therefore Greenfield projects have tended to suffer neglect.

Projects like deep wheat processing have a very long productive lifecycle, measured sustainably for decades with their products in perpetual and growing demand. Typically, the discounted payback period is from 6 – 7.5 years, with an internal rate of return of approximately 40%, profit margin realistically near 50%.

It looks like Russia’s steady economic evolution away from simply exporting raw materials, but opportunities to deepen the dimensions of production will be financed by visionary, practical and pragmatic Asia. The products of which inescapably will be demanded and consumed by Europe one-way or another, if only because of the secure price of proximity.

At a deeper level, this one project example is indicative of many similar projects coming into being throughout the length and breadth of Russia. The vast soybean farms in the southern parts of the Russian Far East have historically simply sold and shipped the harvests unprocessed across the border into Asia. Today, projects are starting up to add value to these crops by processing some of the myriad products obtained from soybeans both for internal consumption as well as for ready export markets literally next door.

The list goes on, with one of the longest coastlines on the planet (23,000+ Miles), the opportunities for fish, mollusk and crustacean farming is vast. The relatively low cost of energy in Russia and no shortage of fresh water also allows for controlled environment farming regardless of climate, be it hydroponics, greenhouses or commercial scale urban agriculture year round. All of these opportunities afford similar value added dimensions through processing and producing market ready finished goods.

On reviewing Russia’s economic path it is worth noting that it has managed to rebalance its exports from 70 percent energy in 2013 to 59 percent in 2017, according to the World Bank. As of this writing, the budget is again in surplus, and government debt stands at a notable 33% of GDP, the lowest among all of the G20 nations. Inflation is now running at a record low of 2.4% year-over-year, well below the CBR’s target of 4% and food inflation despite sanctions is close to 0%. Simply to contrast, and yes, sizes and volumes do make a difference, so just to cherry-pick: The S&P 500 Index is up just a tad over 13% for the past year, while at the same time the MOEX Russia Index has shown 21+% growth with an attractive 6.46% dividend yield, compared to 1.94% for U.S. stocks.

A major economic shift is occurring as secondary, tertiary production, manufacturing and the support and services infrastructure businesses establish and develop inside Russia. Some projections indicate that in these new business areas Russia will show a sustainable 5-6% year on year growth from 2018 – 2020, and perhaps greater. Incredibly, it is woefully under-reported even by the international financial press.

These secondary and tertiary industries have been historically left to the outside world to import into Russia. Be it in agriculture, textiles, machinery or oil patch technologies, Russia is now steadily filling these internal niches, and the opportunities for investors today have vastly expanded into many previously ignored dimensions. It only requires the business will and clarity of “blinders-free” vision to investigate, get involved and step up to the table.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
7 Comments

7
Leave a Reply

avatar
7 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
5 Comment authors
WalterWayne BlowfoxenburgGano1William Reston Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Walter
Guest
Walter

Sanctions against Russia are a big laugh. Sanctions are a big loss to EU countries who want them ended. Maybe the Putin-Trump meeting next month will correct this problem.

Walter
Guest
Walter

Why are my comments not published??

Walter
Guest
Walter

Why are my comments not published ???

Wayne Blow
Guest
Wayne Blow

Go Russia, beats gas pipes and bomb making eh ??

foxenburg
Guest
foxenburg

You say Russia is short of, inter alia…..dry wheat gluten, modified starches, glucose-fructose syrup, molasses.

The Russians would be wise to steer clear of this obesity-inducing Western crap.

Gano1
Guest
Gano1

Farm machinery is selling well too, they build some very good machinery and it is cheaper than Western junk.

William Reston
Guest
William Reston

As usual, excellent insights Mr. Goncharoff. Your opinion articles are a breath of fresh air and a wonderful truth window into Russia for all of us “out here” in the States. Thank you!

Latest

More evidence of Clinton election meddling, as calls for investigation grow louder (Video)

The Duran Quick Take: Episode 85.

Alex Christoforou

Published

on

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the real case for Russia collusion before and during the 2016 US Presidential election, not against Donald Trump, but the Clinton’s and the Democrat Party.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Authored by John Solomon, via The Hill


With Republicans on both House and Senate investigative committees having found no evidence of Donald Trump being guilty of Democrat-inspired allegations of Russian collusion, it is worth revisiting one anecdote that escaped significant attention during the hysteria but continues to have U.S. security implications.

As secretary of State, Hillary Clinton worked with Russian leaders, including Foreign Minister Sergey Lavrov and then-President Dmitri Medvedev, to create U.S. technology partnerships with Moscow’s version of Silicon Valley, a sprawling high-tech campus known as Skolkovo.

Clinton’s handprint was everywhere on the 2009-2010 project, the tip of a diplomatic spear to reboot U.S.-Russian relations after years of hostility prompted by Vladimir Putin’s military action against the former Soviet republic and now U.S. ally Georgia.

A donor to the Clinton Foundation, Russian oligarch Viktor Vekselberg, led the Russian side of the effort, and several American donors to the Clinton charity got involved. Clinton’s State Department facilitated U.S. companies working with the Russian project, and she personally invited Medvedev to visit Silicon Valley.

The collaboration occurred at the exact same time Bill Clinton made his now infamous trip to Russia to pick up a jaw-dropping $500,000 check for a single speech.

The former president’s trip secretly raised eyebrows inside his wife’s State Department, internal emails show.

That’s because he asked permission to meet Vekselberg, the head of Skolkovo, and Arkady Dvorkovich, a senior official of Rosatom, the Russian nuclear giant seeking State’s permission to buy Uranium One, a Canadian company with massive U.S. uranium reserves.

Years later, intelligence documents show, both the Skolkovo and Uranium One projects raised serious security concerns.

In 2013, the U.S. military’s leading intelligence think tank in Europe sounded alarm that the Skolkovo project might be a front for economic and military espionage.

“Skolkovo is an ambitious enterprise, aiming to promote technology transfer generally, by inbound direct investment, and occasionally, through selected acquisitions. As such, Skolkovo is arguably an overt alternative to clandestine industrial espionage — with the additional distinction that it can achieve such a transfer on a much larger scale and more efficiently,” EUCOM’s intelligence bulletin wrote in 2013.

“Implicit in Russia’s development of Skolkovo is a critical question — a question that Russia may be asking itself — why bother spying on foreign companies and government laboratories if they will voluntarily hand over all the expertise Russia seeks?”

A year later, the FBI went further and sent letters warning several U.S. technology companies that had become entangled with Skolkovo that they risked possible espionage. And an agent in the bureau’s Boston office wrote an extraordinary op-ed to publicize the alarm.

Skolkovo “may be a means for the Russian government to access our nation’s sensitive or classified research development facilities and dual-use technologies with military and commercial application,” Assistant Special Agent in Charge Lucia Ziobro wrote in the Boston Business Journal.

The FBI had equal concern about Rosatom’s acquisition of Uranium One. An informer named William Douglas Campbell had gotten inside the Russian nuclear giant in 2009 and gathered evidence that Rosatom’s agents in the United States were engaged in a racketeering scheme involving kickbacks, extortion and bribery.

Campbell also obtained written evidence that Putin wanted to buy Uranium One as part of a strategy to obtain monopolistic domination of the global uranium markets, including leverage over the U.S.

Campbell also warned that a major in-kind donor to the Clinton Global Initiative was simultaneously working for Rosatom while the decision for U.S. approval was pending before Hillary Clinton’s department. Ultimately, her department and the Obama administration approved the transaction.

The evidence shows the Clintons financially benefited from Russia — personally and inside their charity — at the same time they were involved in U.S. government actions that rewarded Moscow and increased U.S. security risks.

The intersections between the Clintons, the Democrats and Russia carried into 2016, when a major political opposition research project designed to portray GOP rival Donald Trump as compromised by Moscow was launched by Clinton’s presidential campaign and brought to the FBI.

Glenn Simpson’s Fusion GPS research firm was secretly hired by the Clinton campaign and Democratic Party through their law firm, Perkins Coie.

Simpson then hired retired British intelligence operative Christopher Steele — whom the FBI learned was “desperate” to defeat Trump — to write an unverified dossier suggesting that Trump’s campaign was colluding with Russia to hijack the election.

Simpson, Steele and Perkins Coie all walked Trump-Russia related allegations into the FBI the summer before the election, prompting agents who openly disliked Trump to launch a counterintelligence probe of the GOP nominee shortly before Election Day.

Simpson and Steele also went to the news media to air the allegations in what senior Justice Department official Bruce Ohr would later write was a “Hail Mary” effort to influence the election.

Congressional investigators have painstakingly pieced together evidence that shows the Clinton research project had extensive contact with Russians.

Ohr’s notes show that Steele’s main source of uncorroborated allegationsagainst Trump came from an ex-Russian intelligence officer. “Much of the collection about the Trump campaign ties to Russia comes from a former Russian intelligence officer (? not entirely clear) who lives in the U.S.,” Ohr scribbled.

Steele’s dossier also relied on information from a Belarus-born Russian businessman, according to numerous reports and a book on the Russia scandal.

Steele and Simpson had Russian-tied business connections, too, while they formulated the dossier.

Steele worked for the lawyers for Russian oligarch Oleg Deripaska and tried to leverage those connections to help the FBI get evidence from the Russian aluminum magnate against Trump campaign chairman Paul Manafort.

The effort resulted in FBI agents visiting Deripaska in fall 2016. Deripaska told the agents that no collusion existed.

Likewise, Simpson worked in 2016 for the Russian company Prevezon — which was trying to escape U.S. government penalties — and one of its Russian lawyers, Natalia Veselnitskaya. In sworn testimony before the Senate Judiciary Committee, Simpson admitted he dined with Veselnitskaya both the night before and the night after her infamous meeting with Donald Trump Jr. at Trump Tower in June 2016.

Simpson insists the two dinners sandwiching one of the seminal events in the Trump collusion narrative had nothing to do with the Trump Tower meeting, a claim many Republicans distrust.

Whatever the case, there’s little doubt the main instigators of the Clinton-inspired allegations against Trump got information from Russians and were consorting with them during the political opposition project.

This past week, we learned from Senate Intelligence Committee Chairman Richard Burr (R-N.C.) that his committee came to the same conclusion as the House: There is no evidence of collusion between the Trump campaign and Russia.

But now there is growing evidence — of Democratic connections to Russia. It’s enough that former House Intelligence Committee Chairman Devin Nunes (R-Calif.) believes a probe should be opened.

There is “obvious collusion the Democrats had through Glenn Simpson and through Fusion GPS, that they were talking directly to Russia,” Nunes told Hill.TV’s “Rising” in an interview to be aired Monday.

Collusion can be criminal if it involves conspiracy to break federal laws, or it can involve perfectly legal, unwitting actions that still jeopardize America’s security against a “frenemy” like Russia.

There is clear evidence now that shows Hillary Clinton’s family and charity profited from Moscow and simultaneously facilitated official government actions benefiting Russia that have raised security concerns.

And there’s irrefutable evidence that her opposition research effort on Trump — one that inspired an FBI probe — was carried out by people who got information from Russia and were consorting with Russians.

It would seem those questions deserve at least some of the scrutiny afforded the Trump-Russia collusion inquiry that is now two-plus years old.


NOTE: This story has been updated from the original to correct that Uranium One is a Canadian company and to clarify that House and Senate investigating committees have cleared the president.

John Solomon is an award-winning investigative journalist whose work over the years has exposed U.S. and FBI intelligence failures before the Sept. 11 attacks, federal scientists’ misuse of foster children and veterans in drug experiments, and numerous cases of political corruption. He is The Hill’s executive vice president for video

 

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Douma chemical weapons hoax exposed by BBC producer

Very frightening for us all is the coordination of propaganda between the States of US, Britain, France and Israel.

Richard Galustian

Published

on

It is beyond doubt that the White Helmets ‘staged’ the false flag operation at the Douma hospital that caused President Trump to attack Syria last April.

Days after the attack the much to be admired, yet still maligned by many, investigative reporter, Robert Fisk was on the ground in Douma and interviewed countless people, videoed the scene, made it public in the newspapers and by TV the fact of the fake sarin attack.

What happened next were attempts to rubbish Fisk’s story; a almost frightening Orwellian propaganda machine kicked in….and went into overdrive. That is to say a combination of ‘corrupt’ reporters; some just naive or dumb, many of whom had never been to Douma or even Syria, plus the full weight of the US, British and French Governments and finally, not forgetting, one of the greatest fraudsters of this century an absolute nobody, that calls himself Eliot Higgins and his ‘Bellycat Organisation’, all weighed in to accuse Fisk of lying.

Clearly not in order of importance but suffice to say Elliot Higgins, is now obviously ‘used’ as a convenient tool for Russia bashing by certain Western powers, but is a total fraud. Rather than write too much about this person, judge by reading an exposé that couldn’t be more revealing, uncovering his lie in the Daily Telegraph (link:http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10730163/The-blogger-who-tracks-Syrian-rockets-from-his-sofa.html).

Not much more need be said about this con-man turned ‘G-Man’. However later in this piece, I will quote some of the Douma ridiculing propaganda of Higgins/Bellingcat, as it is too crass not to be reminded of the way our governments operate.

So based on a complete lie, President Trump ordered an attack on an Assad controlled area in Syria using several bombs including 66 Tomahawk cruise missiles and 19 JASSM-ER (fired from USAF fighters, air to surface standoff missiles). The price for all was around $200million. Much needed money wasted that belongs to the people of US in these austere times.

That by the way does not include the cost of the coordinated attack by the British and French of a total (together) of 17 stormshadow missiles dropped from fighters. Its worth mentioning that in a pathetic display of oneupmanship directed at the British, the French made a last minute decision to add a meagre three more missile types to their attack; ‘Missiles de Croisière Navals’.

As said earlier it is important to remember the Orwellian ‘anti-truth’ propaganda and instead of commenting on it, I’ll just quote what Higgins/Bellingcat said at the time. “The OPCW-FFM report on the February 4 2018 chemical attack in Saraqib, Idlib, reveals not only information about the Saraqib attack, but also the broader use of chemical weapons in Syria by Assad, and additional evidence to support the theory that Assad’s Syrian government forces were behind the April 7 2018 chemical attack in Douma, Damascus. Consistent with Bellingcat’s earlier investigation into the Saraqib chemical attack, the OPCW-FFM report establishes it was the same case in Douma.”

Nonsense.

This scandal of this and other fake White Helmets videos is developing as more details emerge daily, so expect more facts matched with more disinformation and lies from the US and UK.

What we have is first a copy of a twitter exchange which is self explanatory:

So as to be absolutely clear, on February 13th, BBC Syria’s Producer said he could “without a doubt” prove that the Douma hospital scene was false, a White Helmets (WH) fake event.

He said “the Douma Hospital scene was staged. No fatalities occurred in the hospital. All the WH, activists and people I spoke to are either in Idlib or Euphrates Shield areas.

Only one person was in Damascus.”

The evidence is seen above in the tweet at 05:33 – 13 February 2019, the BBC Producer wrote on his personal, verified Twitter account, which has since been made private or perhaps blocked by persons or governments unknown, anyway someone who controls Twitter.

So some sort of what clearly must have been a false flag attack did happen at Douma but it was like a film scene, staged, using as left over evidence, cylinders filled with say oxygen even chlorine, anything but poison gas and certainly not Sarin gas. The cylinders were left in tact, undamaged as if laid there on the site rather than dropped from thousands of feet from the sky – and who can prove Assad’s airforce dropped them? – and how come they remained undamaged when hitting the ground? – ridiculous; how stupid do our governments think we, the people, are.

“Everything around the attack was manufactured for maximum effect.”

Adding “I can tell you that Jaysh al-Islam ruled Douma with an iron fist. They co-opted activists, doctors and humanitarians with fear and intimidation.”

In fact, one of the 4 people filming the scene was Dr. Abu Bakr Hanan, whom the BBC Producer described as a “brute and shifty” doctor affiliated with Jaysh Al-Islam. The Producer further stating that the narrative should be that “there weren’t enough doctors”. That said, there was one even (seen and filmed) filming and not taking part in the rescue efforts.” A joke!

Why, we must all ask, has no major newspaper or TV any large media outlet in US, UK or France headlined or even mentioned these new facts, that Douma was a lie, that it was staged?

On 9 February, James Harkin, published in ‘The Intercept’ an article where Harkin speaks about Jaysh al-Islam’s rule in Douma, among others. His article ends with “What government pummels its citizens with bombs and chlorine to get them to pressure rebels to leave their city? At the same time, Jaish Al-Islam was sending volleys of improvised rockets into Damascus and snatching activists and members of religious minorities for ransom or to be disappeared. It’s between these two violent truths that the real story of the Syrian conflict begins to emerge not in a bewildering collage of images sent from a war zone, designed to terrify and outrage.”

To conclude, the BBC Producer was so disgusted at pro-rebel activists and rebels’ conduct and the seeming complicity of Western officials, he decide to speak out.

As far as the Russian government is concerned, they now are counter accusing the British government of ordering the White Helmets to fake a chemical attack to help persuade President Trump to unleash cruise missiles. The Russian response was to an allegation by the British government that the “demonisation” of the (thoroughly already discredited) White Helmets comes from the Russian government itself.

Which version do you believe?

Very frightening for us all is the coordination of propaganda between the States of US, Britain, France and Israel.

ALL these wars must stop.

I am neither pro-nor against Russia, but it is very clear to anyone that these wars and attempts at regime changing is a US/British/Israeli idea.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Here’s Where America’s Imported Oil Comes from: Venezuela Is Currently the 4th-Largest

Saudi Arabia used to be the top foreign source of oil imported into the US, but now it’s only a very weak second-place to Canada.

Eric Zuesse

Published

on

Originally posted at strategic-culture.org:


At the present time, the latest month for which the US Department of Energy publishes the number of barrels per day (bpd) of oil that’s exported to the US is November 2018. Here are the rankings:

1. Canada        142,206 bpd

2. Saudi Arabia  30,028

3. Mexico        18,020

4. Venezuela     16,889

5. Iraq          11,767

6. Colombia      7,769

7. Russia        7,611

8. Ecuador       5,866

9. Nigeria       5,392

10. Algeria      4,848

11. UK           4,653

12. Norway       4,073

13. Kuwait       3,027

14. Brazil       2,777

15. Belgium      2,075

16. S. Korea     1,927

17. Netherlands  1,462

18. Egypt        1,405

19. UAE          1,771

20. China        1.268

21. France       1,239

22. Singapore    1,232

23. Indonesia    1,204

24. Argentina    1,101

25. Peru         1,061

26. Denmark      1,000

27. Brunei       961

28. Spain        846

29. Angola       833

Here were the top 10 for the entire year of 2015 as reported by Bloomberg Finance at Forbes. For comparison to today, the country’s sales and rank in November 2018 is also indicated [between brackets]”

1. Canada        3.2 million bpd  [1. Canada 142,206]

2. Saudi Arabia  1,1 [2. Saudi Arabia 30,028]

3. Venezuela     780,000 bpd [4. Venezuela 16,889]

4. Mexico        690,000 [3. Mexico 18,020]

5. Colombia      370,000 [6. Colombia 7,769]

6. Iraq          230,000 [5. Iraq 11,767]

7. Ecuador       225,000 [8. Ecuador 5,866]

8. Kuwait        210,000 [13. Kuwait 3,027]

9. Brazil        190,000 [14. Brazil 2,777]

10. Angola       190,000 [29. Angola, 833]

Clearly, the figures change over time. Whereas Angola was #10 in 2015, it’s #29 now; and whereas Russia, Nigeria, and Algeria, weren’t in the top 10 in 2015, they now are.

US President Donald Trump is bringing down the latest Venezuelan monthly number from 16,889 to close to zero. On 25 August 2017, Reuters headlined two stories, “Trump slaps sanctions on Venezuela; Maduro sees effort to force default” and “Venezuela says US sanctions designed to push Venezuela to default”. The first of those reported that, “US President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro’s ‘dictatorship’.” The second reported that Venezuela’s Government daid that Trump’s action “essentially forces the closure of its US refining unit Citgo,” which means bringing an end to Venezuela’s oil exports to the US

Venezuela’s socialized oil company, PDVSA, of which Citgo is the US distributor, had never prepared for the measures that Trump is now imposing, and Reuters’s report said, “As a result, it will be it tricky for PDVSA to refinance its heavy debt burden.” The Reuters report continued:

“Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people,” US Treasury Secretary Steven Mnuchin said on Friday.

PDVSA, the financial engine of Maduro’s government, is already struggling due to low global oil prices, mismanagement, allegations of corruption and a brain drain.

However, the likely failure of Venzuela’s oil company is due not only to the lowered price of oil, but to the fact that Venezuela’s oil is among the two costliest in the world to produce, because it’s from the dirtiest source, tar sands, much like Canada’s oil is. The difference between Canada and Venezuela is twofold: first, that whereas Canada is a vassal-state of the US empire and so its aristocracy is allied with America’s aristocracy (which controls America’s Government), Venezuela isn’t. And, second, that whereas Venezuela has a monoeconomy that’s based on oil (which accounts for around 95% of Venezuela’s exports), Canada does not.

Saudi Arabia used to be the top foreign source of oil imported into the US, but now it’s only a very weak second-place to Canada in this, exporting only 21% as much oil to the US as does Canada. This is a huge decline for the Sauds.

Whereas Saudi oil is the world’s most “light” or cleanest and least-costly to produce and therefore has the lowest “carbon footprint” of any oil, Canada and Venezuela have the most “heavy” or dirtiest and most-costly to produce and therefore have the highest “carbon footprint” of all the world’s oils.

(NOTE: There are many different ranking-systems for the ‘average’ cost per barrel of oil produced, such as this and this and these, but all tend to vastly underestimate in order to continue the case for fossil fuels. The BBC once noted that its calculation-system “only covers the cost of production, not the cost of exploration and development.” And it also ignored the cost of transit. It also ignored environmental costs. It also ignored the costs to taxpayers for the many subsidies they pay in order for the fossil-fuels investors to continue investing in those companies. The environmental site “The Energy Mix” headlined in April 2018, “Ditched Bitumen Desperately Seeks True Commitment” and reported that fewer and fewer investors were continuing to trust the industry’s reported numbers regarding the costs of tar-sands oils. Also, on 11 February 2019, they headlined “Trans Mountain’s Fee Plan for Fossil Customers Represents $2-Billion Taxpayer Subsidy”. But, mostly, the heavy taxpayer subsidizations to the fossil-fuels industries are ignored, both by consumers and by investors. Realistically, the tar-sands oils in both Canada and Venezuela are costing far more than any per-barrel oil price that’s below $100. They are money-losers, but bring lots of money to the ‘right’ people.)

So: the US is replacing the world’s cleanest oil with the world’s filthiest oil, and that’s not only from Canada but also from Venezuela. However, because the US aristocracy want to take over Venezuela, the US Government now is set to zero-out oil imports from Venezuela, so as to increase the pressure on Venezuela’s Government to place in charge there a leader who will do America’s bidding. Canada has been working right alongside the US to achieve that objective, and will probably be supplying to the US much (if not all) of the 16,889 bpd oil that currently has been supplied by the other producer of very dirty oil: Venezuela. The US produces fracked oil, which is dirty but not as dirty as that from Canada and Venezuela. The US, Canada, and Venezuela, have been committed to ignoring the global warming problem. To the extent that the problem becomes globally recognized, the oil-production in all three of those countries will decline in its marketable price even more than will the oil-production in other countries (especially than Saudi Arabia’s oil-production, since that’s the cleanest); and, so, the profits from those dirty oils will quickly (especially for Canada and Venezuela, where it has already happened) turn into losses. All three governments — Venezuela, Canada, and US — are trying to postpone that, till as late a time as possible.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending