Will Venezuela turn out to be the next Iran in the world of petrochemicals?
Speaking on his weekly radio and TV show, Hugo Chavez, Venezuela’s president, announced the country’s intention to become a global petrochemicals superpower. The aim is for Venezuela to achieve petrochemical revenues of $100bn/year from the current $1.7bn. By 2013, the country would invest about $20bn in the industry and create 700,000 jobs – about 10 times the number of workers in its oil industry. And by then there would be 70 companies producing petrochemicals.
The plan is said to be divided into two phases – the first up to 2014 and the second till 2021 by when Venezuela would have nine complexes in operation. President Chavez also said that the states of Zulia, Falcon, Carabobo, Anzoategui, Tachira, Barinas and Apure will form seven petrochemical poles in the development of a national network of petrochemical socialist companies.
This report on Vheadline.com argues that the move is natural and logical given the natural gas available in the country.
“For years, the industry looked on agog, asking why Venezuela apparently couldn’t see the blindingly obvious…decades went by while natural gas went virtually undeveloped — or wastefully flared at well-head to boost oil output rates.”
Bolivian president Evo Morales too is eying petrochemicals, according to media reports. The country has large natural gas reserves and was last year looking to attract Petrobras and Braskem to make petrochemical investments. But with the two Brazilian companies backing out, Bolivia is now turning to Iran.
I doubt if Iranian companies are going rush to the region anytime soon. After all they have to set their own houses in order and finish their numerous projects.
It is difficult to take either Venezuela or Bolivia seriously. Yes, they have the feedstock but the geopolitical risk far outweighs that advantage. Indian companies worried about competition can rest easy