The Return to Mexico
A version of this commentary was originally published in Spanish in El Nacional on May 11, 2022.
In the next few days, representatives from Nicolás Maduro’s regime and the Unitary Platform (Plataforma Unitaria), will return to Mexico to resume the negotiations deferred by the heir of the Chávez’ regime last October, when Alex Saab—designated, along with Álvaro Pulido, as the prodigious financial operator of a transnational criminal enterprise based in Miraflores, and as a Drug Enforcement Agency (DEA) informant for almost a year in 2018—was extradited to the United States.
Crossing the Rubicon
The head of the Maduro delegation, Jorge Rodríguez, had established a firm deadline to return to the negotiating table: the incorporation of Saab to the negotiating team. Six months later, the former DEA informant is no longer the sine qua non to return to Mexico. Saab's network of illicit companies that launder money from the Maduro administration has been replaced by other financial operators in Russia, Turkey, the United Arab Emirates, China, and Iran.
What the Colombian businessman could potentially exclaim is no longer a threat to the political stability of the Venezuelan regime. However, he has become a key token in negotiations with President Joe Biden and his administration. While Maduro is insistently demanding for Saab’s release, knowing that it is exceedingly difficult to obtain it because of the separation of powers in the United States, he manages to expand and stand his ground in the negotiation. For example, he could demand the reversal of the sanction that has been imposed on Carlos Erik Malpica Flores since 2017, the first lady Cilia Flores’ favorite nephew. Additionally, Maduro could petition the suspension of economic sanctions imposed onto the state oil company, Petróleos de Venezuela, S.A. (PDVSA).
An Instrument to Save Time
Maduro has never believed—and nothing indicates that he will change his mind—that dialogue is the way to resolve Venezuela's political crisis, which focuses on restoring democracy. He has always seen it as the instrument to buy time in terms of power and divide the opposition. Maduro’s raison d'être is to remain in command of the presidency in Venezuela.
Every year that Chávez's successor remains in power, he can strengthen his position within the criminal structure that consists of several bosses who control numerous industries: drug trafficking, human trafficking, the smuggling of minerals (gold, coltan, diamonds, etc.), the sale of oil and refined products, among others.
In Mexico, the Unitary Platform seeks to overcome the Venezuelan political crisis through democratic coexistence.
In a meeting with leaders of the Broad Front that was held last Friday at the Andrés Bello Catholic University, Gerardo Blyde , head of the interim delegation, detailed that during the substantive negotiation, stakeholders must produce an agreement of democratic coexistence in which everyone is recognized. That is, to co-occur with Maduro and the transnational criminal enterprise. Due to the memorandum of understanding signed by the parties in August of last year and converted into law by Maduro's National Assembly, a main interest of the de facto regime is lifting the economic sanctions on PDVSA.
The Need for Foreign Exchange
Chavez’ successor yet again needs foreign exchange from oil exports that take place in democratic countries, due to the unavailability of funds of PDVSA, the Ministry of Defense, Minerven, the Central Bank of Venezuela, and members of the criminal company. The funds were deposited in Russian banks in March.
Maduro wants the Biden administration to grant his administration the authorization to drill, sell, and transport Venezuelan oil to foreign partner companies of PDVSA: Europe's Repsol and Eni, the United States’ Chevron, and service companies Halliburton, Schlumberger, Baker Hughes, and Weatherford International.
So far, Maduro continues to go back and forth. The oil company and the regime allies’ lobbying efforts have not managed to obtain the new authorization that would allow the expansion of operations in Venezuela. To convince the Biden administration, the regime has stated that the former trade unionist of the Caracas metro will not receive the financial gains because the crude oil exports would directly pay PDVSA's outstanding debt with its foreign partners.
Contrary to the above, Chevron's 2021 Annual Report notes that the “outstanding long-term loan to Petroboscan of $560 million has been fully provisioned for at year-end 2021.” In addition, it reports that the income of affiliates improved last year, “mainly due to the loss of value of Petropiar and Petroboscán in Venezuela in 2020.” That is, the losses of 1.396 billion dollars and $1.112 billion dollars, respectively, were zero on the balance sheet for 2021.
Therefore, the argument used in Washington that Maduro and company will not receive revenue from exports conducted by Chevron because the assets earned will be used to pay off debt is delusive.
In a quick calculation, the net income for the Madurista regime would be around 26 million dollars per day, with an average export of 500,000 barrels per dollar, sending the current volumes to Cuba and China to pay off the China Fund debt.
A secondary argument posed by the European Union is to veto the import of Russian oil within the next six months to stop financing Putin's war against Ukraine. In this sense, the Spanish Repsol and the Italian Eni would have the opportunity to increase their crude oil productions in Venezuela. This scenario that would require a change in the Hydrocarbons Law so that the foreign oil partners have a majority of the share of capital in joint ventures.
In this context, today is not the time to return to Mexico, even less so now that the de facto regime wants to obtain authorization from the Biden government for Chevron, Repsol, and Eni to exploit and commercialize hydrocarbons in Venezuela.
Furthermore, the well-being of Venezuelans has never been on the list of priorities of the team led by the paranoid president of the National Assembly. Its mission has always been the alternative and it has never kept it veiled. For the reasons mentioned in this piece, it is imperative that Maduro and company are not served this opportunity on a silver platter to achieve their goals.
At this time, returning to the negotiating table will only favor Maduro's stay in power well beyond 2024. Is that what we want?
Antonio de la Cruz is a senior associate (non-resident) with the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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