Venezuela's Oil Expansion: Defying the Laws of Arithmetic

Petroleos de Venezuela's (PDVSA's) new $56 billion "strategic expansion" plan is not worth the paper it is printed on. The projected capacity expansions and related capital investments simply do not add up. PDVSA's plan may reflect President Hugo Chavez's political ideas about oil policy and PDVSA's role in the Bolivarian Revolution — but it is not economically or financially viable.