A coals-to-Newcastle story. Venezuela has enormous heavy-oil reserves, but needs to blend that oil with lighter grades to get it to market.

Governments are horrible resource managers; in no time, they turn bounty to poverty because they can’t avoid the political temptation of using them for “social welfare”. The U.S. Leads the world precisely because we have private ownership of minerals, development by private capital, and the rule of law.

HOW TO WRECK YOUR COUNTRY

Venezuela Set To Import Oil

Venezuela’s oil production, which accounts for 95 percent of the country’s export earnings, should be used in world classrooms as a textbook case of what happens when a populist government starts distributing a country’s wealth in cash subsidies, without investing in maintenance and innovation. Much like happened with Cuba’s once flourishing sugar industry, Venezuela’s Chávez-inspired populism has destroyed the goose that laid the golden eggs.

In 1999, when Chávez took office, PDVSA had 51,000 employees and produced 63 barrels of crude a day per employee. Fifteen years later, PDVSA had 140,000 employees, and produced 20 barrels of crude a day per employee, according to an Aug. 14 report by the France Press news agency.

Venezuela’s net oil exports have plummeted from 3.1 million barrels a day in 1997 to 1.7 million barrels a day in 2013, according to U.S. Energy Information Administration estimates.