FALL OF VENEZUELA
Once an influential oil titan, nation has reached end of an era.
CABIMAS, Venezuela — For the first time in a century, there are no rigs searching for oil in Venezuela. Wells that once tapped the world’s largest crude reserves are abandoned or left to flare toxic gases that cast an orange glow over depressed oil towns.
Refineries that once processed oil for export are rusting hulks, leaking crude that blackens shorelines and coats the water in an oily sheen.
Fuel shortages have brought the country to a standstill. At gas stations, lines go on for miles.
Venezuela’s colossal oil sector, which shaped the country and the international energy market for a century, has come to a near halt, with production reduced to a trickle by years of gross mismanagement and U.S. sanctions. The collapse is leaving behind a destroyed economy and a devastated environment and, many analysts say, bringing to an end the era of Venezuela as an energy powerhouse.
“Venezuela’s days as a petrostate are gone,” said Risa Grais-Targow, an analyst at Eurasia Group, a political risk consultancy.
The country that a decade ago was the largest producer in Latin America, earning about $90 billion a year from oil exports, is expected to net about $2.3 billion by this year’s end — less than the aggregate amount that Venezuelan migrants who fled the country’s economic devastation will send back home to support their families, according to Pilar Navarro, a Caracas, Venezuela-based economist.
Production is the lowest in nearly a century after sanctions forced most oil companies to stop drilling for or buying Venezuelan oil — and even that trickle could dry up soon, analysts warn.
The decline has diminished beyond recognition a country that just a decade ago rivaled the United States for regional influence. It is also unraveling a national culture defined by oil, a source of cash that once seemed endless; it financed monumental public works and pervasive graft, generous scholarships and flashy shopping trips to Miami.
Crippling gasoline shortages have led to an outbreak of dozens of daily protests across most Venezuelan states in recent weeks.
In the capital, Caracas, periodic fuel shipments from Iran, paid for with the country’s remaining gold reserves, provide a semblance of normality for a few weeks at a time. But in the countryside, residents have defied the pandemic lockdown to block roads and clash with police amid their desperate demands for the modicum of fuel they need to survive.
Across Venezuela’s oil towns, the sticky black crude that once provided jobs and social mobility is poisoning residents’ livelihoods.
In Cabimas, a town on the shores of Lake Maracaibo that was once a center of production for the region’s prolific oil fields, crude seeping from abandoned underwater wells and pipelines coats the crabs that former oil workers haul from the lake with blackened hands.
Cabimas’ desolation marks a swift downfall for a town that just a decade ago was one of the richest in Venezuela.
During the boom years, PDVSA, the state- owned oil company, showered the residents of oil towns such as Cabimas with benefits including free food, summer camps and Christmas toys. It built hospitals and schools.
Now the bankrupt company’s tens of thousands of workers have been reduced to dismantling oil facilities for scrap metal and selling their distinctive coveralls, emblazoned with the company logo, to make ends meet.
The end of oil’s central role in Venezuela’s economy is a traumatic reversal for a nation that in many ways defined a petrostate.
After major reserves were tapped near Lake Maracaibo in 1914, oil workers from the United States poured into the country. They helped build many Venezuelan cities and instilled in the country a love of baseball, whiskey and big gas- guzzling cars, differentiating it forever from its South American neighbors.
As a driving force in the founding of the Organization of the Petroleum Exporting Countries in 1960, Venezuela helped Arab nations take control of their oil wealth, shaping the global energy market and the geopolitical order for decades to come.
Even in those heady days, Venezuela’s prominent oil minister, Juan Pablo Pérez Alfonzo, warned that there were pitfalls to sudden oil wealth: It could lead to excessive debt and the destruction of traditional industries.
“It is the devil’s excrement,” Perez Alfonzo famously declared. “We are drowning in the devil’s excrement.”