IMF Discreetly Preps Massive Aid Package For "Day After" Maduro's Fall
The International Monetary Fund is reportedly making plans for the "day after" embattled President Nicolas Maduro's fall
, according to Bloomberg
. Though there's been little momentum in military defections following US-backed opposition leader Juan Guaido's offer of amnesty to any army officer that switches loyalties, Washington sanctions have effectively strangled state-owned PDVSA's access to global markets. News of IMF maneuvering also comes amidst fresh reports the US is amassing aircraft, troops and armored vehicles on the Venezuelan border under the pretext of getting humanitarian aid into the country.
The only significant cash flow that remains after the oil sanctions is through India, Venezuela’s second-biggest oil market after the United States, which still recognizes the Maduro government, and is now reportedly seeking to avoid purchases through US banks
and even financial institutions with a heavy US presence. According to a Reuters report on Friday
, "India has asked one buyer of Venezuelan oil to consider paying the South American nation’s national oil company PDVSA in a way that avoids the U.S. financial system
, an Indian government source said, after Washington imposed fresh sanctions on Venezuela last month."
So far much of the discussion over what is driving the bizarre Trump Administration intervention into Venezuela centers around the comments of National Security Adviser John Bolton to claim it’s about oil. In a previous analysis we looked at the prospects of the huge Chavez Basin, formerly the Orinoco Basin, said to hold the world’s largest reserves of oil by some definitions. Now it’s becoming clearer that this de facto war is about far more than control of the heavy oil of the Chavez Basin in Venezuela.
First it’s important to look at which oil companies were already staking various claims on the region’s oil prospects. Within Venezuela, Chinese oil companies led by China National Petroleum Corporation, and the Chinese government have been playing a major role since the Chavez era. In fact the role has become so great Venezuela’s government owes China some $61 billion. Because of the financial problems of the Maduro government, China has been taking debt repayment in form of oil. Since 2010 the Russian state oil company, Rosneft has been involved in joint projects with the Venezuela state PDVSA, mainly in the Orinoco/Chavez Belt. Some years ago Rosneft extended some $6 billion in loans to Venezuela to be also repaid in oil. A recent statement from Rosneft says that $2.3 billion is due by end of this year. Rosneft has participation in five oil projects and 100 percent in a gas project. In addition to CNPC and Rosneft, France’s Total SA, Norway’s Equinor, and US Chevron all hold minority stakes in Venezuela projects, with most vowing to stay despite the political crisis. That raises the question what they know beyond the well-documented heavy oil of Venezuela
The real prize?
The real prize that these powerful international oil giants are eyeing likely lies well to the east of the Orinoco heavy oil fields where they now operate. The real prize is the ultimate control over one of the best-kept secrets in the oil industry, the huge oil reserves of a disputed area straddling Venezuela, Guyana and Brazil. The region is called Guayana Esequiba. Some geologists believe the Esequiba region and its offshore could contain the world’s largest reserves of oil, oil of far better quality that the heavy Orinoco crude of Venezuela. The problem is that owing to the decades-long dispute between Venezuela and Guyana the true extent of that oil is not yet known.
Historically, both Venezuela and Guyana, a former British colony, laid claim to Esequiba. In 1983 a so-called Port of Spain Protocol, between the governments of Venezuela and Guyana, declared a 12-year moratorium on the Venezuelan reclamation of Esequiba to allow time for peaceful resolution. Since then a special UN Representative has kept the situation frozen. Neither party has developed exploration of the reported huge oil deposits in the territory. In January 2018 the UN Secretary General referred the status of Esequiba to the International Court of Justice in The Hague, where it sits today.
Now it gets messy. In September 2011 the government of Guyana filed for an extension of its offshore Exclusive Economic Zone to the UN Commission on the Limits of the Continental Shelf in order to extend its continental shelf by a further 150 nautical miles. To get UN permission, they declared the area was subject to no territorial disputes, ignoring the very active Venezuela dispute over Guayana Esequiba. Venezuela filed a strong protest. To further complicate the situation, Guyana awarded international oil exploration rights in the disputed maritime area.