Venezuela needs to extract its oil much more than what it needs Citgo.

Sir, Colby Smith and Gideon Long report that “Venezuela has long been fearful of missing a payment on Citgo’s debt — the country’s only bond not yet in default — since it could mean losing control of Citgo the jewel in the crown of PDVSA’s foreign assets” “Venezuela sanctions leave refiner’s future in doubt” August 13.

Let us be clear, in terms of helping Venezuelan’s being able to eat and buy medicines, which is what they most need right now, it is not Citgo that is worth the most, it is what it can extract in oil and sell in the markets, because that’s where the real money is. Moreover, if creditors would lay their hands on Citgo, they would most certainly love to continue refining Venezuelan oil.

Sir, what’s the worth of Citgo if Venezuela does not sell to it its oil in very favorable conditions? If I was a creditor that had my possibilities to collect based on Citgo, I would be very nervous about hearing a “Hear it is, take it!” 

And that might be why they so anxiously try to convince Juan Guaidó that he can´t afford to lose it. Personally I would, as I have many times said say “good riddance”. 

Why on earth are government bureaucrats running a normally very low margin’s refinery operation?

Sir, in 2000 I ended an interview in the Daily Journal in Caracas with: “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 first make an IPO for Citgo, subject to their obligation to purchase oil products at market prices."

So, legitimate President Guaidó, don’t ever think of paying $913, in late October, to holders of a bond maturing in 2020 issued by PDVSA, which is backed by a majority stake in Citgo.

@PerKurowski

When compared to Venezuela’s oil reserves, Citgo is nothing.

Sir, Colby Smith refers to Citgo as “the last-remaining crown jewel of Venezuela” “Stakes rise for Venezuelan assets stateside” Alphaville May 17.

Frankly, Venezuela has what has been reported as the largest oil reserves in the world. What is Citgo compared to that? Absolutely nothing!

What’s valuable for Venezuela is its oil, but the value of it has been greatly diminished, first and foremost because the government handles the redistribution of all net oil revenues, but then also because way too many have wanted to profit from doing something with our oil, for instance refining it, abroad.

In 2000, in an interview in the Daily Journal of Caracas I said:

“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, [its extraction].

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 is 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."

Sir, we have millions of our young growing up undernourished and still some try to hang on to a very high hanging fruit as Citgo, so my current tweet sized proposal is: 

So that Venezuelans can eat quickly, hand over Pdvsa (and Citgo) to Venezuela’s creditors quickly, to see if they can put all that junk to work quickly, to see if they can collect something quickly, and pay us Venezuelans, not the bandits, our oil royalties quickly.

The Iraq Study Group established by the U.S. Congress, reported in 2006 the following: "There are proposals to redistribute a portion of oil revenues directly to the population on a per capita basis. These proposals have the potential to give all Iraqi citizens a stake in the nation's chief natural resource." Sadly it came to nothing

Sir, if that were to be implemented in Venezuela, then Venezuelans would live in a truly independent nation, and not just in somebody else’s business.

PS. A couple of years ago I gave a speech to transfer price specialists in Washington recounting the very curious thing of Venezuela´s state PDVSA that sold petrol at lower than market prices to their then recently acquired refinery subsidiary in the US, CITGO, paying unnecessary taxes to another than their own tax man, probably just because they wanted to show the Venezuela public that Citgo was such a good investment. Crazy? Yes of course, but that´s life in a tropical country.

@PerKurowski

Venezuela poses a unique opportunity, for all citizens of the world, to clearly define what should be considered as odious credits, and how these should be treated.

Sir, Colby Smith and Robin Wigglesworth quote a holder of Venezuelan debt with: “The ultimate objective is to reach a point where [Venezuela] regains market access at market-determined terms without the risk of renewed default”,“Venezuela debt fight pits veterans against hot-headed newcomers” March 13.

It is absolutely clear Venezuela needs much financing to reconstruct its entire run down basic infrastructure but, as a citizen, having seen how much public indebtedness goes hand in hand with corruption and waste, and how it so often makes it harder for the private sector to finance its needs, I would not mind Venezuela not reaching that “ultimate objective” for a long-long time, especially not as long as the government already receives directly all oil revenues.

Our Constitution clearly establishes that all “Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation… are of public domain, and therefore inalienable and not transferable” and yet 99% of the debt it contracts is implicitly based on its creditors having access to the revenues produced by extracting Venezuela’s non-renewable natural resources, mainly oil. 

So now, the least our legitimate creditors could do, is to help us extract oil; and to that effect the following is a message I have been tweeting for about two years: “For Venezuelans to be able to eat quickly, starts by quickly handing over PDVSA’s junk to its and Venezuela’s creditors, so that they quickly put it to work, to see if they are able to quickly collect something, so to pay us citizens, not bandits, some oil royalties quickly”

But, that said, what is most important is to classify all Venezuela’s debts. Many of these were not duly approved; others had a large ingredient of corruption and lack of transparency and so all these must be scrutinized in order to establish their legitimacy.

For example, when Goldman Sachs in May 2017 handed over $800 million cash in exchange for $2.8billion Venezuelan bonds paying a 12.75% interest rate, to a notoriously corrupt and inept regime that was committing crimes against humanity. Especially since Lloyd Blankfein cannot argue an “I did not know”, that to me is as odious as odious credits come.

Sir, it behooves all citizens of the world to use this opportunity to set up an adequate defense against governments anywhere, mortgaging their future with odious credit/odious debts.

That also includes stopping statist regulators from distorting with a 0% risk weight the allocation of bank credit in favor of the sovereign, against the 100% risk weighted citizens. 

@PerKurowski

Optimally the utilities’ long-term views should result from their local connections.

Sir, Jonathan Ford describes in very clear terms why “private equity firms shouldn’t own regulated utilities, full stop. In very long-term businesses providing essential services, investors should have time horizons to match.” “Why private equity investors and utilities should not mix” June 17.

But there is more to this issue. In 2000, Electricidad de Caracas, EdC, the electrical utility of Caracas, Venezuela, that had been founded and managed by a local family for 105 years, was sold off to a big time international player, AES. I was in shock, and so I wrote in several Op-Eds. 

Not only would we lose the natural accountability of the management that exists when these are your neighbors and suffer the same service failings that you do; but it would also take that company out of the hands of electrical engineers and place it into the hands of financial engineers. 

Yes, the new owners proceeded to sell assets, repurchase shares, take up new loans and pay out dividends, leveraging the company up to the tilt… and many needed investments were delayed.

While EdC was being negotiated I wrote: "From my local electrical distributor, what I'm interested in seeing are good engineers with colorful helmets, accompanied by competent accountants with simple calculators, which only serve to add and subtract. I do not like to observe the presence of lawyers, financiers, brokers, publicists and other professionals little or nothing related to bring me the light home…. I get very scared when I hear terms like ‘unfriendly takeovers’ ‘poison pills’ and ‘golden parachutes’.”

To that I should have added “And I absolutely want my neighbors to hold management control and a clear majority of shares in that company.”

PS. The EdC story had an even sadder ending. In 2007, after trying to negotiate tariffs with a loony government, AES withdrew. Unfortunately, the Local that stood up to forcibly repurchase it, was Pdvsa… and you probably know what happens to anything that is in the hands of the current Pdvsa.

@PerKurowski

What would you as a bare minimum call creditors knowingly financing a government that in itself constitutes a brutal violation of human rights? Odious?

Sir, John Paul Rathbone, Robin Wigglesworth and Jonathan Wheatley, with respect to the surrealistic debt-restructuring initial steps in Venezuela quote Hans Humes of Greylock Capital, who is forming an investor committee with “Ultimately, there is going to be more money made in Venezuela than even in Argentina”. But the authors also rightly conclude in “The geopolitical and humanitarian consequences are likely to be larger still”, “Caracas plays its last cards” November 22.

Sir, “Food is in short supply” does not even begin to describe the tragedy.

Look at Venezuela as a prison. The food and medicines supplies it receives should be more than enough to keep all inmates healthy, but, since the guards have stolen so much of it, many prisoners, many children among them, are dying. And, in order to be able to steal more, the guards also took on huge debts in the name of the prison. And now the original creditors, or those who bought in at a later stage, and who all had all the possibilities of knowing very well what was going on, but that turned a blind eye to it when the interest rates offered by the guards were so irresistibly juicy, they want to be repaid. Will the guards do so? Will the prisoners allow that?

I have for decades called for Venezuela’s oil revenues, lately around 97% of all Venezuela’s exports, to be shared out to all its citizens, as the only way to guard against any odious or just plain dumb exercises of centralized statist power.

So what would happen if now the Venezuelans agree, in a referendum, on doing just that and then proceed to carry out the necessary changes in its constitution; and asks the IMF or the World Bank, with the assistance of other banks, to set up an oil revenue distribution system that keeps all oil exports invoiced in the name of Venezuela’s 30 and so million citizens? I am no lawyer but would a judge in New York approve the embargo of Simoncito’s part of oil, that if received would help to feed and keep Simoncito healthy?

Desperate times calls for desperate solutions, but perhaps some desperate solutions carry the potential of turning into magical solutions. For an oil cursed nation like Venezuela, that might just be what opens up its future to a much better tomorrow.

But the rest of the world could also benefit immensely. We quite frequently hear about the need for a sovereign debt restructuring mechanism, SDRM. If such mechanism started by clearly establishing the fact that most odious debts have its origins in odious credits. There often is prohibition against usury, but even more important for all us citizens all around the world, and especially for those generations of citizens coming after us, to have some sort of mechanism that disincentive the award of odious credits to governments.

In reference to that I am begging Venezuela’s National Assembly to request that Venezuela’s Supreme Court of Justice in exile initiates a process destined to carefully revise the origin of all Venezuela’s credits to see if they can be deemed legitimate or not.

https://perkurowski.blogspot.com/2014/05/risk-premiums-and-ethic-ratings.html

@PerKurowski

Jockeying for position to currently advise Venezuela on its debt restructuring could have serious legal, or at least reputational consequences

Sir, Robin Wigglesworth, with respect to Venezuela’s debt writes: “Any restructuring will be a Herculean task, given US sanctions” “Debt restructuring battle brews over Venezuela” November 21.

It is not only the US sanctions. Since many, or probably most Venezuelan consider those debt origination in odious or at least totally non-transparent credits we have not the faintest trust in that negotiators helping the government to restructure is helping us.

So any negotiator now would have blacklisted himself, for those restructuring negotiations that can only begin in earnest when the Maduro government is gone.

Also I cannot understand that, for instance one of the prime renegotiation advisors you mention like the “mysterious art-loving Mexican billionaire called David Martinez”, can be so naïve so as to believe that the threat of US sanction to Americans will not be extended to anyone substituting for Americans.

In summary you do not advise governments that are violating basic human rights without the possibility of facing very serious consequences for that. As a minimum they should be aware that many of us Venezuelan will, when we can, try to recoup any odious restructuring fees paid to them… and keep them away forever from Venezuela

Personally I am much in favor of the Venezuelan Supreme Court of Justice in exile, requested by the Venezuelan National Assembly, initiates the first stage of any debt restructuring, namely classifying all those debts in bona-fide, dubious or odious. 

https://teawithft.blogspot.com/search?q=Venezuela+debt

@PerKurowski

What stops a Supreme Court of Justice of Venezuela in exile, to request the embargo of oil unduly received by Russia?

Sir, you suggest that one of the few ways the Maduro regime could manage the restructuring of PDVSA’S bonds, is that “Moscow might… extend the cash Caracas needs to service PDVSA debt in return for cut-price stakes in local oil ventures”, “The geopolitics of Venezuela’s debt” November 5.

You really think Moscow would throw its relative scarce good money at this?

The Venezuelan Constitution in its Article 12 establishes: “Mining and hydrocarbon deposits, whatever their nature, existing in the national territory, under the territorial sea bed, in the exclusive economic zone and on the continental shelf, belong to the Republic, are the property of the Public domain and, therefore, inalienable and imprescriptible.”

And so, though I am not a lawyer, it would seem that any negotiation that assumes that local or foreign oil ventures receive an ironclad guaranteed access to Venezuela’s oil might be very naive.

I ask, if Russians end up taking oil from Venezuela under a shady deal not approved by its real General Assembly, that which is recognized by so many countries, what stops its Supreme Court of Justice in exile to request international courts to embargo it?

As I see it the best thing to happen would be a constitutional reform in Venezuela that decrees all net oil revenues belonging equally to all its citizens. What judge will then order the embargo of oil that belongs to citizens who at this moment need it to avoid death from starvation?

And the biggest benefit of doing so would be freeing the Venezuelans from having to live under the powerful thumb of a government that centralizes all that oil revenue, 97% of all the nation’s exports, in very few hands… sometimes even the hands of outright bandits.

Sir, those who awarded odious credits, should not be able to negotiate behind the back of Venezuela’s people, with those who contracted odious debts.

https://perkurowski.blogspot.ca/2017/06/a-simple-but-complex-question-from.html

http://theoilcurse.blogspot.com

@PerKurowski

The Venezuelan National Assembly, the real not the fake, needs to be careful it does not legitimize odious credits

Sir, Henry Foy, Robin Wigglesworth and Gideon Long report on how “Venezuela [Maduro] has invited international bondholders to negotiations over its foreign debt as Caracas seeks to mitigate the impact of US sanctions and survive a deepening economic crisis.” “Venezuela sets up talks on foreign debt” September 9.

Legitimate debt/credit, sort of legitimate debt/credit, more dubious debt/credit and clearly odious debt/credit composes Venezuela’s public debt. It behooves Venezuela, as well as all citizens in the world who could in the future face similar challenges, to make sure that in any negotiations here referred to, there are true representatives of the Venezuelan citizens, in order to make sure that differentiation occurs, and that there is no legitimation of debts that do not entirely merit it.

In this respect I hope the Venezuelan National Assembly, by voting, not by some finger-pointing appointments, selects who are going to represent it in any of these negotiations; and then formally notifies all interested parties of their names, that including all officials of the Paris Club.

Clearly those Venezuelan citizens representatives must present no conflicts of interest with either creditors or with those in government that have been involved with the “contracting” of such debt.

PS. What’s “sort of legitimate debt/credit”? That which is legitimate in legal but not in moral terms.

http://unsustainabledebtsustainability.blogspot.ca/2015/10/we-must-not-allow-vulture-funds-to.html

@PerKurowski

Venezuelan creditors, what if from now on oil belongs in equal parts to the citizens and not to the government?

I refer to Jonathan Wheatley’s and Robin Wigglesworth’s “Venezuela’s Russian debt tangle heightens risk of default” June 10.

Sir, had Venezuela not have had oil, there would be no so much financing of its plain lousy governments.

Equally, had the oil in Venezuela belonged to Venezuelan private citizens and not to the government of turn, its governments would not have had access to as much credit.

Venezuela’s current constitution states: “Article 12: Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental shelf, are the property of the Republic, are of public domain, and therefore inalienable and not transferable.”

What if there was a change in the constitution to: “Article 12: Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental shelf, are the property in equal shares of all Venezuelan born and alive citizens, and therefore inalienable and not transferable.”

Then all the oil revenues would belong to Venezuelan citizens and be distributed to them by means of an oil revenue sharing mechanism.

Then those who current creditors of Venezuela, and who must have been perfectly aware of how lousy its government was by only looking at the risk premiums paid, would have those risk premiums to reflect the reality of the risks of lending to such lousy governments as Venezuela’s

In such circumstance could a tanker that carries oil owned by all the Venezuelan private citizens be embargoed?

Would a judge order that embargo knowing that, as a direct result of it, many Venezuelan citizens, old and young, with real names and faces, would then die because of lack of food and medicines?

http://perkurowski.blogspot.ca/2014/04/creditors-of-venezuela-read-our.html

@PerKurowski

Do not odious debts derive directly from odious credits or odious borrowings?

I refer to Jonathan Wheatley’s, Andres Schipani’s and Robin Wigglesworth’s FT: Big Read on the finances of Venezuela “A nation in bondage” November 11. I am taken aback by its distant coolness to what are life and death issues. “revenue-to-payments ratio”?

Sir, I have often asked, and not only in reference to Venezuela: does not what is being financed have anything to do with financing… is it only a matter of risk premiums being right? Let me go extreme to make my case. Should a bond issue that financed some extermination chambers be repaid? And should it then matter whether those chamber use Zyklon B, or the lack of food or medicines. Of course, whether those responsible for any deaths did it with intent, or only because of sheer ineptitude, matters a lot. But for informed financiers? How much “We didn’t know” can you really claim these days?

Sir, the world would be well served by having a Sovereign Debt Restructuring Mechanism but, for such a SDRM to also serve We the People well, and not only governments and their financiers, it would have to start to identify very clearly what should be considered odious debt derived from odious credits and odious borrowings.

And it should also define very clearly how much financiers could aspire to have their cake and eat it too. The article quotes Siobhan Morden, a Latin American strategist at Nomura saying “Investors who this year bought a PDVSA bond maturing in April 2017, for example, have made a 70 per cent profit, thanks to coupon payments and a price rise of 50 cents on the dollar as the bond approaches maturity” 

Two questions stand out: The first: should these bondholders be repaid the same as those who purchased the issue originally and held on to it? Perhaps yes, perhaps no. 

The second: Anyone out there thinks this 70% profit over a short period was just a result of a strict financial analysis, or did it contain some inside information that could affect its legal validity.

FT, yes I am Venezuelan, and so I might very well be too much on the crying side on this issue, but what would you in FT say if UK fell into the hands of a totally inept government and this one is kept in place by financiers out for a quick buck?

Sir should only a non-payment cause a default of sovereign bonds? Are there not implicit moral negative covenants that could be called on by the world, such as not letting your people starve only to serve the debt?

PS. Just to make my arguments clearer and therefore hopefully stronger in Venezuela I have been on this issue long before the Chavez/Maduro times.

@PerKurowski

Should it be required for a sovereign to be placed on a “The Bad” list, for its financiers to be morally concerned?

Sir, Jonathan Wheatley and Eric Platt write: “Just how much room for manoeuvre does cash-strapped Petróleos de Venezuela have? It is the question that has dogged investors, economists and the South American country’s own people as the government of Nicolás Maduro struggles to manage a crippling debt burden and cling to power” “Debt swap respite for Venezuela state oil group” October 25.

No! I can assure you Sir that most Venezuelan’s, are much more concerned with where they will get food or medicines for today, and about whether they should dare to walk out on the street, than with PDVSA’s debt.

And that should also concern PDVSA’s creditors, because it is truly a shame if they are totally uninterested in what human right violations they might be financing.

For instance, petrol (gas) is still being sold at about US$ 1 cent per liter, only so that government partners can make a killing smuggling it over the borders.

Really, it surprises me that these type of issues seem so irrelevant to FT. 

@PerKurowski ©

Compared to the poor of Venezuela, PDVSA’s bondholders, as a group and over time, have benefitted way too much

Sir, Eric Platt and Robin Wigglesworth write that PDVSA’s Rafael Rodriguez, Mr del Pino’s chief of staff, appealing to the investors to take part in the proposed swap said: “We hope investors will support PDVSA in the same way that we have supported them for many years”, “Caracas piles on pressure for $5.3bn bond swap” October 19.

For the poor of Venezuela, who demonstratively might not have received more than 15 percent of their per capita share of Venezuela’s oil revenues, that is an insult. I don’t care one iota about these bondholders; as a group and over time they have benefitted way too much.

As an example, Elaine Moore and Simeon Kerr when recently reporting on an upcoming international bond issue of Saudi Arabia wrote: “a banker not involved in the (US$ 20bn) deal, estimates that Saudi Arabia will price at 150bp above US Treasuries for a five-year bond and 160 to 165 for 10-year debt”. “Saudi debt pitch focuses on youth and reform” October 18. Sir, compare that with what the land that advertises itself to have the largest oil reserves in the world, has to pay.

Sir, very high risk premiums paid by a sovereign debtor, might evidence that a government and its financiers, are in cahoots for some mutually benefitting corruption.

And please do not tell us PDVSA is not Venezuela, as like if Aramco is not Saudi Arabia.

@PerKurowski ©

FT, where’s the real hurdle? In PDVSA’s debt swap, or in PDVSA and Venezuela’s government?

Sir, Eric Platt and Jessica Dye write: “Analysts and bankers remain optimistic that a deal will be clinched, as a default would cut both Venezuela’s and PDVSA’s credit lines with lenders and deepen the country’s recession.” “PDVSA debt swap plan hits hurdle” October 11.

Really? Could it not be so that helping to finance one of the demonstratively most inept governments ever could only deepen and prolong a recession that, right after a huge oil boom, in a country that states it holds the largest oil reserves in the world, has its citizens starving and without access to medicines?

Venezuela is in utter disorder, and its people in utter despair, and still its government sells gas at less than US$ 4 cents a gallon, thereby allowing some to smuggle it out and make juicy profits. That, no matter how you look at it, is a de facto economic crime against humanity.

So “T Rowe Price owned $274m worth of the 2017 bonds”. Does T Rowe Price really think that its clients, though they might make huge speculative profits in the short term, are truly benefitted long term by financing an entity as mismanaged as T Rowe Price knows PDVSA is? Would T Rowe Price’s investors have liked it if Venezuelans had financed a PDUSA and thereby helped keep a hypothetical authoritarian regime in power? When is what is being financed going to be an issue? Or is it really that you can finance anything at all, as longs as the risk premiums are juicy?

Sir, to be clear, I am not writing this solely in “opposition” to the current Venezuela government. For decades, long before the Chavez years, I have been opposed to odious debts, odious credits and odious borrowings… anywhere.

PS. I am supposing no one would dare to expose such naiveté as arguing that lending to PDVSA is distinct from lending to the Venezuela government.

@PerKurowski ©

Is there no moral issue in Venezuela bondholders being paid as a result of people being denied food or medicines?

Sir, Jonathan Wheatley writes: “In a broad sense, Caracas is already a serial defaulter. It has defaulted on its people by denying them access to the dollars they need for essential imports…” “Only one of Venezuela’s creditors is being paid without fail, on the button, every time: its international bondholders” “Venezuela clutches at straws in desperation to avoid bond default” September 28.

Let me ask: What would be a correct description of he who collects from a debtor knowing that he is being paid by a government because it denies food and medicines to its people? Or is that a moral irrelevance?

And what if the international bondholder’s would all just turn up to be close affiliates to the current government? I mean “A PDVSA bond maturing in 2017, on which a $2.3bn payment is due on November 2, is trading at about 80 per cent of par — hardly a sign of panic” could be indicative of it. Would it then just be another case of corruption? Insider trading?

The world needs a Sovereign Debt Restructuring Mechanism (SDRM) but, for that to be of any service or at least not a disservice to We the People, it needs to start with clearly defining what should be considered as odious credits or odious borrowings. As a minimum all bonds should not be bearer bonds, as we citizens should always have the right to clearly be able to identify who are financing our governments, and in what conditions, so that if we are not able to hold our governments accountable, like in Venezuela, we are at least able to hold its (our) creditors accountable.

@PerKurowski ©

You pay for what you paint!

Sir Benedict Mander in “Venezuela’s state oil company gears up for a $2bn bond issue” May 8, quotes experts with “expected to be a two year zero-coupon bond yielding about 16 per cent” and that it “will not affect the yields on existing PDVSA or sovereign debt – one of the best performers in emerging markets this year”. It is hard to understand how they would get away with that.

That said PDVSA with all the richness that it controls, if it was well run, should have to pay only some basis points more than the risk free rate and so, in order for your readers to understand better what is going on, perhaps you should have translated what was painted on the PDVSA oil tanks in the photo. It says "Fatherland Socialism or Death"… hence 16 percent.

The Global Coalition of Oil-Cursed Citizens

Gazprom in a public-private partnership?

Sir, in your “Putin’s piste”, July 7, you sort of allude that there might be a public-private partnership between Russia and Gazprom. Nonsense. That is just a public-public partnership that uses private sector flexibility to avoid the constraints that reason imposes on public spending. If Gazprom is anywhere like the Venezuelan PDVSA that I know, then whatever it does beyond their basic oil and gas exploration, production and refining business, is just a way to non-transparently lose or distribute some of their oil and gas profits previuosly made.