An interview by Daily Journal’s Leopoldo Taylhardat
The DJ recently interviewed columnist Per Kurowski on his views regarding the Venezuelan and international oil industry. We caught up with him with his foot virtually on the plane's steps for a flight to Guatemala. He was committed to a week's work there for the Inter-American Development Bank (IADB).
As usual with him, his statements were clear and frank. Per has been writing well-balanced opinion articles for the DJ for several years now.
PK: "The OPEC Summit Conference results? In general, very good. Results will depend on the unity of OPEC and its decision to defend its interests in very specific areas such as the fiscal and environmental discrimination against oil.
“I hope I'm not seen as ungrateful, but it looks to me as a poor beginning when we give so much publicity to the donation by the European Union of 250 million euros, almost one year after the Vargas disaster, because we all should know that even the least discrimination against our oil will, in the mid-term, easily save the EU that amount - through volumes and prices - in one-month additional revenue.
“The good future results for Venezuela we may get from OPEC depend mainly on how we push the organization's lazy bureaucrats, normally afraid of the risks involved in any change. Let's not forget that the high-taxes problem has been affecting us for several years. Why didn't they point it out before?
"About the San José Pact I can't say much. I'm not familiar with the subject but-and it seems to be an international procedure -any country has, I thinkthe right to use any strength it may haveto defend its interests in any way it feelsreasonable. At least it seems politicallyproper when it's done by the world's superpowers. The New York candidate to Congress, J. Lazio said, during a debate with Hillary Clinton: ... ask our allies and those who went to bat in the Desert Storm War, to think about our needs ...'- or words to that effect. So, if someone can send some of his own people to fight and die for the oil, what's wrong with giving out some oil, out of good will or, as some people claim, because of foolishness?
"The volume of oil involved in the San José Pact is very small, so selling it at discount to other poorer countries may be a minor sin, if anything. Except when it is used for purely political reasons - now that would be a major sin.”
"On the other hand, Venezuela need not feel guilty for the difficulties other poorer countries may experience due to increasing oil prices. We are innocent infants compared to those countries selling renewable products such as medicines at prices thousands of times their cost, including raw materials and production. Let's stop sucking our fingers ...
“Let me elaborate some more on this subject that, after all, is in fashion. The discussion over "fair prices" is, in my opinion, irrelevant. As long as oil is needed and scarce, its price will be high. If it becomes abundant and could be replaced by some other energy source, its price will go down. Any reference or comparison to the prices of other products is irrelevant, because regularly and naturally, the prices of any product or group of them can go up while others fall.
“Fairness is, to me, a matter of participation: the products obtained from a barrel of crude oil are sold in Europe for the equivalent of $200. Laborers housewives, teachers, and so on must pull out of their pockets that $ 200 and pay in cash. So it is evident that this is the market price for it. In other words, oil has never before been so valuable.
"On the other hand, we the oil owners and producers, we do not get much for a barrel of oil. Our share is only about $30 - or 15 percent - out of the $200. The rest is shared by refiners, transporters and distributors, who get $25, and the ever-hungry European government that grabs up to $160 - 80 percent.So it's unfair for the country selling that non-renewable resource to get only percent of the market value. It's like selling our house and being obliged to pay the real estate office over 80 percent of the price."
Will the current Venezuelan government's oil politics contribute to change the world oil panorama?
"I'm not sure. It depends on the government's capacity to strengthen the country and to encourage the nation to defend our interests. All our interests, not only the oil. Since consumer countries do know how to defend their interests, including oil, we must be continuously defending ours. Not just spasmodically. Results will depend on the strength of will displayed by all of us. What cannot be denied is that the oil politics promoted by our current government were not only necessary, they were taken just in time, at the eleventh hour."
Shouldn't we emphasize conservation over production?
"We must either preserve or sell our oil. It's up to us. What we must not do is fall into the death trap of producing while the price stays above the cost of extraction and shipping – that is, accepting as valid the idea that we must be satisfied as long as the oil pays for its production and transportation.
"I am definitely against that. The nation must obtain a higher level of added value. And that's what we have OPEC for. If we get only 15 percent on the selling price of our product, then we are such poor users of our buried-for millions-of-years-wealth that we deserve having the wells locked up so future generations can benefit from oil. That also applies to the use of oil revenues. If we continue being as inefficient as in the past, we don't deserve to benefit from the nation's oil.”
The appointment of a Venezuelan as " Citgo president is it convenient or not?
"A Venezuelan as president of Citgo? Why not? Of course, it depends on who that Venezuelan is. Personally, I believe the Venezuelan state must control 100 percent of the exploration, extraction and basic refining operations. This isthe only way it can have the possibility for using it as a weapon for geopolitical negotiations or ensure its value via, for example, OPEC. Until someone convinces me of something different, I insist that anything else the Venezuelan state tries to do with oil means a loss or a net reduction of the benefits brought by the first phases of the operation
"Because of that and the fact that I have seen the corporation's reports, I still can't understand the economic reasons for having bought and kept Citgo. There is evidence in the reports that it's being subsidized by PDVSA.
“And, for those who argue so much in favor of privatizing PDVSA, I challenge them to make an IPO for Citgo, subject to their obligation to purchase oil products at market prices."
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