Venezuela: O RLY?

Thanks to reader 'UL' for the headsup. Why am I completely unsurprised about seeing US-sponsored ongoing bullshit about Venezuela exposed by facts? The report below mentions OPEC, but being DJNW has decided to leave out the main culprit of the propaganda campaign. The Energy Inormation Administration (EIA), sponsored by the US State Dept, has for close on ten years refused to include Venezuela's bitumen-like heavy crude as oil and skewed its figures for Venezuelan exports as a result, which in turn has allowed the North to come forth with its VenezuelaWeAllGonnaDie tosh and nonsense....that never happens. Anyway, here's the note:

Few Discrepancies In Venezuela Government Oil Export Data - Barclays

 

7:22p ET January 27, 2011 (Dow Jones) Few Discrepancies In Venezuela Government Oil Export Data - Barclays

DOW JONES NEWSWIRES

CARACAS (Dow Jones)--Venezuela's actual oil exports, which have long been questioned by industry organizations, are likely to be close to the government's official data, Barclays Capital analysts said in a research note Thursday.
In a new study, the bank compared Venezuela's reported oil exports since 2005 with what other countries reported as imports from the South American nation and found only marginal discrepancies.
"We do not find a major deviation from the official export data published by Venezuelan institutions," the bank said, adding, "therefore, we maintain our view that Venezuela does not have a problem of cash constraints."
With the petroleum sector serving as the lifeblood of the Venezuelan economy, economists and bond investors pay close attention to oil prices as well as the country's production and export levels to gauge its ability to make debt payments.
The bank estimated Venezuela exported 2.4 million barrels a day in 2010, down from an estimated 2.5 million in the previous year. For 2010, Barclays estimated that about 2 million barrels a day were sold at market price while the remainder were sold "under preferential conditions."
That compares to the Venezuelan government figures, which put 2009 exports at nearly 2.7 million barrels per day and 2.44 million barrels per day during the first half of 2010. The country said it produced 3.1 million barrels per day in the first half of CONTINUES HERE

Peru import/export update

1) Peru's climbing exports have allowed it to import greater quantities wthout disrupting the balance of payments or putting pressure on its currency.

2) Mining exports have been the big driver of all exports.

3) Quantities mined of all the top metals have either been static or dropping, with very little evidence of more production added to its industry.

 (click to enlarge any chart)

In other words, Peru's expansion isn't some government-led miracle, it's a country that hasn't done a thing to expand its productive base and has ridden its luck on the world commodity price rise.

Bottom line: Peru is an economic luckhouse, not an economic miracle.

Is Mexico's economy weaning itself off its addiction to The USA?

So there I was on Friday evening, rummaging through Mexico's Ministry of the Economy website like any normal obsessed LatAm numbers nerd, when I came across the country breakdown for exports from Mexico. As anyone with a passing interest in LatAm economics knows, Mexico is extremely tied to its big northern neighbour when it comes to export revenues as this first chart shows nice and clearly:

Each of those columns shows the total US dollar value of exports from Mexico to the great wide world in the first six months of each year, that's because we get a nice clean comparison to what has happened so far in 2010. As is clear, exports to the US are the lion's share of things, as for example in the first half of 2010 total Mexico exports tallied U$141.039Bn, with U$133.008 of that going to The USA.

At first glance it seemed to these eyes like business as usual, but then on staring at the numbers a bit there seemed to be a bit of a trend. So a flick of the wrist, a new calc and sure enough, we get this chart generated.

 

Yes indeed, the percentage of Mexican exports to The USA has been dropping in recent years. The drop isn't massive (eg 7.6% in the period 2004 to 2010) and nobody will deny that the US is still by far the most important market for Mexican goods but there's definitely a trend happening here.

What's going on here? Can the drop be totally blamed on the depletion of the Cantarell oil field, or is Mexico finally getting itself into gear, getting new markets and trying to kick its utter dependency on The USA? Sure seems that way. Inquiring minds (etc)....

Adventures in basic mathematics, Ecuador oil edition

Your humble scribe was surprised to see this report in his interwebnetpipes this morning:

BEIJING, Sep. 6, 2010 (Xinhua News Agency) -- Ecuador finance minister Patricio Rivera has said the country would sell 360,000 barrels/day of crude oil to PetroChina (601857.SH; PTR.NYSE) in the next four years, according to a Dow Jones Newswires report.

 The South American country's finance minister was quoted as saying that the crude oil will be sold at market prices. CONTINUES HERE

Why so? Time for the funmath!

1) According to home gov't and EIA figures (which unlike Venezuela largely agree) Ecuador currently produces 490,000 barrels of oil per day (bbl/d)

2) Ecuador's internal consumption of oil currently runs at 180,000bbl/d

3) This means that even in the very VERY unlikely event that Ecuador stops selling its wares to traditional partners (such as main customer USA or next door Peru) they still have another 50,000bbl/d to magic up from somewhere.

So tell me again how this greenheaven Yasuní ITT initiative will work? Meanwhile, today's pretzel math gives us a great chance to CUE THE MUSIC!

Setty calls out the bizmedia on Venezuelan oil

This links to a great post and puts numerous newswires, media outlets and analysts to shame. Here's how Setty kicks it off, click through to read the rest:

Is there anyone out there who gets the numbers right on Venezuela oil shipments to the USA? Not as far as I can tell. Everybody — Reuters, Barclay’s, you name it — reports a U.S. import figure that is much lower than the reality. Here’s why, and how to avoid this common error. Note: If you are frightened of Microsoft Excel, skip this post and keep reporting the wrong number. Nobody cares except me. In fact if you do it my way you will piss off your boss, because it makes Venezuela look better than the EIA numbers. So really, just ignore this post. Truth will get you in trouble.

Continues here.

Where the oil comes from (guest post)

My man setty over at his blog settyblog (friends only, sorry) wrote this post today. After asking nicely he let me re-post it here. So here it is. Enjoy.

Where The Oil Comes From

U.S. government and news preoccupation with Venezuela isn't just because the country is ostensibly leftist. It's got much more to do with Venezuela's role as the U.S.'s second-most important oil supplier.

The U.S. had net imports of oil, coal refined products and electricity from 62 countries in 2009. This diversity conceals the concentration of suppliers.

Data provided by the U.S. Department of Energy also mask the importance of imports from Venezuela. This page, updated monthly, ignores both U.S. exports and (because the statistical series started in the 1940s, before the Virgin Islands was a major U.S. import point), treats the U.S. Virgin Islands as a foreign country. Since Venezuela provides two thirds of the crude for the Hovensa refinery on St. Croix, that takes many Venezuela barrels out of the ranking.

This U.S. Commerce Department data is the first place I've found that adds up U.S. net exports and imports of oil tallied by country and by dollar value, rather than by barrels. It turns out that the biggest net suppliers to the U.S. in 2009 were:

Canada $54.1 billion (25% of total)
Venezuela $26.4 billion (12%)
Saudi Arabia $21.5 billion (10%)
Nigeria $18.7 billion (9%)
Mexico $17.5 billion (8%)
Russia $13.1 billion (6%)
Algeria $10.6 billion (5%)

That's 75% of the oil imports coming from seven countries.

To understand the importance of a diversity of suppliers to a consumer like the United States, I highly recommend this documentary. In particular the part around 8:48.

A bit of Colombia trade

I know what you were thinking as you woke up this morning, dear reader. You stretched, yawned, made for the shower and thought to yourself, "I wonder how the Colombian trade balance has performed in the last three years or so?", so fortunately IKN is here to help you out on that burning question.

Here's the monthly import and export figures for Colombia in the period January 2007 to January 2010.

As we can see, the country went through the same sales slump (both inbound and outbound) as the rest of the region thanks to the financial crisis. We also see a slow but sure rebound in 2009 that has put the worst behind it but still isn't close to the 2008 good times. So yet again, you're going to have to take the rah-rah brigade's GDP growth fanfares with a large pinch of salt this year, as the better comparative will not be Year-over-Year but 2010-to-2008.

As for the exports mix, this zippy chart put together above shows the percentage take-up of its main exports. Surprisingly coffee is but a minor part of the mix, with the big big growth seen recently in hydrocarbons (oil, gas etc) and coal (which is a hydrocarbon in itself, I suppose). Together, oil/gas and coal in Jan'07 was less than 40% of Colombia's exports, but in Jan'10 that percentage was nearly 59%, a big upmove in just three years. Ferro-nickel used to be a bigger slice of things, but it not no more.

Put simply, Colombia doesn't give a rat's gluteus maximus if Chávez stops buying its textiles cos it's now busy enough selling oil to the gringos. Mojitos served, the end.

Peru import/export update

We haven't done this for a while, so last week's publication of Peru's January Imp/Ex numbers gives a good time to check out the state of play.

Let's start with exports-only. There were superduper fanfares in the local press about exports rising 44% or 48% or some weird number, but a more careful look at the numbers show that January 2010 compares very closely to Janaury 2008. In other words, two years have gone by and the net result for the country is zero.

click on charts to enlarge

On the one hand, it's a good thing to see Peru coming out of the crisis trough of course. However, it hardly merits the rah rah you hear (and keep hearing all year) of the YoY comparatives that get spun out of Lima.

Also let's note, once again, just how little Peru's export mix has evolved. It's still a primary materials monoculture with metals (mainly copper and gold) making up the largest chunks of the total. How do you add value to a 1kg ingot, Twobreakfasts? Meanwhile, other traditional exports have trodden water along with the non-traditionals too. Here's the percentage breakdown of exports for January 2010:

Mining exports: 62.48%
Other Traditional Exports: 17.2%
Non-Traditional Exports: 20.31%

Peru's historic exports mix is with 60% metals....nowadays it's even higher. So much for the productive "miracle" of Peru's growth, which in fact rests squarely on the shoulders of large world miners that remit all profits back to Canada, Australia, the USA, the UK etc. Viva investment grade, baby...

Now comparing imports to exports, we again see that 2010 is no better compared to 2008 or even 2007, such is the inertia.

A recovery is on? Yes no doubts, with that steady climb in imports underlying the good news. Anything better than 2007 or 2008? Nope. So next time the headlines scream the Kool-Aid at you, remember the real context of the "growth" figures that you'll see out of Peru this year.

More evidence of Bolivia's imminent economic collapse

From time to time you get talk in Englang biz circles about how demand for Bolivia's natgas has been dropping, for example the mail received by this humble scribe from some reader who is clearly a great fan and utter admirer of IKN (even though they did use a lot of swear words in the mail, made certain incorrect assumptions concerning the marital status of my parents at the time of my conception and also forgot to leave their name at the bottom of the missive).

The normal tactic from the Evo-haters is to take the highest spike in demand (back in mid 2008, when it was cheaper for Brazil to buy as much Bolivian natgas as possible under the contract terms than for PBR to actually pump it themselves), wait until it drops to 20 million cubic metres per day (that happens occasionally, as its the minimum amount that Brazil can buy in a contract that runs until 2019) and start shouting "END OF WOOORLD!". In other words, the normal biased BS chatter from people that can't wait for a whole nation (that they probably couldn't find on a map) to collapse just so they can watch nine million people starve and riot and kill each other because some asshole in the WSJ or Fox told them that Evo Morales was an ooga booga man.

Sorry dudes, not gonna happen. Let's check out the other export market for Bolivia's natgas, Argentina, and the deal struck today that will be formalized in a super duper signing ceremony twixt Evo and Klishtina late March.

Yup, the 2.4m cubic metres per day getting pumped to Argentina will become a minimum 5mm3/d this year. It then starts ratcheting up bigstyle in 2013 and ever onwards and upwards 2017 to 2026.

Add to that the recent average of 22mm3/d to Brazil, or if you prefer the average of 25mm3/d this month Feb 2010 (the StoopidChorus always goes quiet when that number starts clicking back up), mix in the fact that two major clients are better than one when it comes to price negotiations and you end up thinking that Evo&Co isn't going to be short of a penny or two as this decade unfolds.

Today's Bolivia has the best growth in the region, virtual zero inflation, a strong currency backed by sound monetary policy, savings at record levels, a property boom going on that speaks of growing acquisitive power of its citizens and is getting kids to schools and bellies full at rates never seen. Now that growth is getting locked in by long-term exports contracts that will benefit the state first and the oil companies second. Don't you just hate it when PinkoCommieSocialists are better at running a nation's economy than your neocon liars-in-chief?

Singanis served, the end.