Watching the money flee: Now China pulls out from Venezuela contracts

As they say in the news industry, follow the money.

And the money in Venezuela, like a lot of Venezuelans, is fleeing.

Here's a new one from Reuters:

SINGAPORE (Reuters) - PetroChina Co plans to drop Petroleos de Venezuela SA (PDVSA) as a partner in a planned $10 billion oil refinery and petrochemical project in southern China, said three sources familiar with the matter this week.The company’s decision adds to state-owned PDVSA’s woes after the United States imposed sanctions on the company on Jan. 28 to undermine the rule of Venezuelan President Nicolas Maduro. However, dropping the company was not a reaction to the U.S. sanctions but follows the deteriorating financial status of PDVSA over the past few years, said two of the sources, both executives with China National Petroleum Corp, the parent of PetroChina.“There will be no role of PDVSA as an equity partner. At least we don’t see that possibility in the near future given the situation the country has been through in recent years,” said one of the executives, asking to remain unidentified because he is not authorized to speak to the media.

The Reuters sources say it's nothing to do with U.S. sanctions. But that, in the context of what the pullout means, is irrelevant: The Maduro dictatorship still loses the use of the money, or the oil earnings the money can bring. And the Chinese reasons are just as damning as if the whole thing had been about U.S. sanctions: Chavista fiscal practices, which have almost literally run Venezuela's once-vast oil industry back into the ground. The story signals that the Chinese have decided that right about now's a good time to finally cut their losses.

It follows a big Russian pullout move that does seem to be linked to U.S. sanctions:



Russia, along with China, is one of the big imperial overseas players that are the last pillars holding the Venezuelan dictatorship up. They have refused to join most of Latin America, Europe, Australia, Israel, other Asian states and the U.S. in recognizing Venezuela's constitutional president, Juan Guaido, and instead hollered unsolicited nonsense about a 'coup,' with the millions in the street the handiwork of U.S. interference, and the whole thing cooked up by Uncle Sam. They also blocked Venezuela's Maduro regime in the United Nations from getting a condemnation last week, and put out propaganda, lapped up by ignorant Democrats such as Rep. Ilhan Omar of Minnesota, to argue for maintaining the status quo, calling for useless been-there-done-that 'negotiations.'

But now they're speaking louder ... with their money. They are both pulling out, because, well, it's time to pull out. They wouldn't do this if they didn't see Maduro lasting. It's pretty obvious they don't and if they put all their pennies on the Maduro pile, they are going to lose it all.

Get a load of how much money and investment that is from Fox News's Holly McKay:

For starters, China has a satellite tracking facility at the Capitán Manuel Rios Air Base in Guárico, while Russia has a cyberpresence at the Naval Base Antonio Diaz "Bandi" in La Orchilla, an island north of Caracas.
“This adds space and cyberspace capabilities that the Maduro regime does not have,” Humire pointed out. “For Russia and China, pressuring the U.S. via Venezuela adds leverage to their regional ambitions in Ukraine and Eastern/Central Europe (for Russia) and Taiwan and South China Sea (for China).”
Furthermore, Venezuela owes a total of more than $120 billion just to China and Russia.  Both Beijing and Moscow are, according to geopolitical experts, worried that if Maduro falls, their already-strained budgets will take a major hit.
Russia’s tight relationship with Venezuela dates back to the reign of Hugo Chavez, and in the ensuing years, Venezuela has been one of the few in the international community to back Russia’s involvement in Syria and Ukraine. But most importantly, Russia’s state-run oil company Rosneft has an especially deep-rooted interest in Maduro’s government.
Two years ago, Rosneft took an almost 50 percent stake in the U.S-based oil company Citgo, which is owned by Venezuela’s energy conglomerate PDVSA. Citgo serves as collateral on Venezuela’s debts to Rosneft, and fundamentally gives Russia strategic sway in Latin America – a region where the U.S. once had significant weight.
“Both lose a strategic ally in South America, and both risk losing the ability to collect in full the debts owed by Venezuela,” cautioned William Ogborn, strategic communications and public diplomacy expert for numerous U.S. government entities including the House of Representatives and the Department of Defense.

Here's the good part: The news is just going to get worse for Maduro:

Early this morning, the U.S. put out notice that non-U.S. entities have until April 28 to get their keisters out of Venezuela if they are involved in any transactions with Venezuela's now-sanctioned oil company. You can bet they will get out because not getting out will negatively affect any and all of their operations with the U.S. Access to U.S. markets, U.S. supplies, U.S. imports, U.S. exports, U.S. banks, will be ... cut off. 

Maduro's not going to weather that one. And already the capital flight has started. No wonder he's holding some kind of emergency meeting this morning with all his trusted cronies:



Do I think he's running out of other people's money? I do.

Image credit: ABC News screen shot from the television.




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