WHY NOT?

Everybody else has decided to write about it so why not me.  CITGO of course the wholly owned affiliate of PdVSA  the national oil company of Venezuela.

Well, maybe not wholly owned.  You see, CITGO is the only thing that Venezuela owns that works and is worth anything, so when it's parent, being broke, needed money to continue to pay the God knows how many political hacks on its payroll and the coffers of the thugs who run the country off they went to their socialist (HAH) buddies, Russia's ROSNEFT, a wholly owned susidiary of Putin & Friends for a bit of the ready.  Sure, says Putin, provided you pledge about 49% of CITGO...not that we don't believe in Chavezismo but oil son, things aren't looking so great right now.

Well, things are looking worse and there is no doubt that at all that PdVSA will default on debt sometime later this year which will no doubt trigger the cross default in the ROSNEFT loan which will result in a payment demand which when not made will trigger a move to collect the collateral which will create an international mess of monumental proportions...assuming the civil was, presently in its early stages, doesn't end the country for good.

What makes this all so great is that CITGO is an American company and if anybody thinks that the Russians have a chance in hell of gaining any control over 39 pipelines and a half dozen refineries in the United States, that person might consider professional help.  By the same token, did the Russians really think they were receiving decent collateral.  Surely, they have top flight advisors (Memo to Charlie: find out who's lawyering this thing for the Russkies).   Can't believe they did, so what do they have.   Welllllll, they will certainly have a claim which if coupled with the other 51% would constitute ownership.  Now if the Venezuelan government could be induced to selling the remaining shares and if the two pieces could be put together some clever young investment banker might make a heck of a fee...or get assassinated in the process with this cast of players.  There sure as hell is a seller in PdVSA and there are probably buyers if...and it may be a big if...the bleeding of CITGO by PdVSA has not wrecked the infrastructure of the company.

Overlooking all of this is the total collapse of Venezuela and the undoubted national default which will occur later this year.  It is a enormous story and a desperately sad one.  If civil war of some sort breaks out there will be involvement with other countries particularly Colombia.  I watched the President of that country rather closely during his visit to the United States this week.  He does not instill confidence in possibly becoming the point man in this looming crisis.  Indeed...well, I shall refrain from political comment even in a country where I once had a deep involvement.  There will come a time.

Have a great weekend