Bottom line: The death of Venezuelan leader Hugo Chavez will not usher in any changes in energy policy, as acting president Nicolas Maduro—who has effectively been leading the administration for the past several months—will stay the course for survival. Changing energy policy at this juncture would endanger cash flow and be tantamount to political suicide.
Analysis: Chavez’s party the PSUV is in survival mode and Maduro is their best chance at holding on to power. At the moment chavistas appear unified behind Acting President Nicolás Maduro, Chávez’s chosen successor, but there are deep divisions within the PSUV. In the immediate wake of his death, internal pressure is high to adhere to Chávez’s declared wishes.
Maduro will pander to the far left, who are his strongest supporters. Just as Chávez did, he is likely to increase social spending for misiones in the weeks leading up to the election. And Maduro will win – whether cleanly or not.
Elections will be set within 30 days, capitalizing on the emotional ties many Venezuelans felt for Chávez – the sympathy vote. But elections will probably take place 40 to 90 days from now, not in the next month because of Venezuela’s typical vacation schedule.
There will be no change in policy, and especially not energy policy. Maduro has already been effectively leading Venezuela for the past few months. More than anything, Venezuela needs money, which it mainly gets from oil exports. Neither Maduro nor any other politician would dare endanger Venezuela’s cash flow by changing oil production or export policies.
China is a prime target for sales; China is happy to loan money repayable on favorable terms in oil. Moreover, China, the China Development Bank and a number of Chinese companies, including CITIC, China Railway Engineering Corp., and Sinohydro Corporation, signed contracts worth over US$10 billion with the Chávez administration. Still, our sources indicate virtually every major project is running years behind schedule (e.g. the Batalla de Santa Inés refinery in Barinas).
Even if Henrique Capriles Radonski, the strongest opposition candidate, were to win the upcoming presidential election, his hands would be tied in a government that Chávez has molded for the past 14 years. The Courts, the Armed Forces, the National Assembly – they are all run by Chávez loyalists who would not cooperate with a Chávez opponent.
The strongest internal rival for Maduro is Diosdado Cabello, who has been conspicuously absent from some key meetings. Yesterday, 5 March 2013, Maduro met with all the chavista state Governors except Cabello. Cabello’s mother died on 3 March 2013, which is either a good reason or a convenient excuse to explain his absence if Maduro and his clan do not want Cabello privy to workings of his inner circle.