Petro & Oil Reserves Supporting It Perhaps Don't Exist, Report Shows

A month down the road since Nicolas Maduro, the Venezuelan president, proclaimed the formation of the Petro, a state-backed crypto which would allegedly take the nation out of six-digit hyperinflation, the only place where the Petro crypto appears to exist is in the media.

A recent report from Reuters documented the environment in the oil-rich savanna area around the small town of Atapirire, where the huge volume of the Oil-reserves purportedly backing the Petro are located. 

5 Bn Barrels of Crude Oil 

In February this year, President Maduro announced the decision to form the Petro and the scantily populated area around Atapirire was pitched as a liquid goldmine, having proven reserves of more than 5.3 billion barrels of crude oil, quoting data from "an autonomous international certification agency." 

As the Venezuelan government struggled to find a way out of economic conditions comparable to postmillennial Zimbabwe and Weimar Germany, these oil reserves in an oilfield known as Ayacucho I were promulgated as the backing asset for the new crypto, with a price of around $66 per barrel of Venezuelan crude oil as a guide. 

As per the official line, funds from several investors across the globe would circulate into the region, creating employment and setting new standards of living in Venezuela's squeaking oil export sector that is infected with a chronic shortage of investment and outdated machinery. 

When Reuters visited the region, a rather different reality was discovered, as occupants of the area have seemingly seen neither the Petro nor its promised investment coming into Atapirire. As a matter of fact, as it ended up, practically no one inside or outside the country perceived to have ever got hold of the Petro crypto. 

Most people in Venezuela and outside see all this as a big sign that President Maduro's government is either basically inept or strongly fraudulent on the matter of the Petro. 

Building Castles in the Air 

Speaking to Coinidol, Alejandro Machado, a cryptocurrency consultant and an experienced computer scientist in struggling Venezuela accuses the government of making 'eggs in moonshine.' 

He says:

“There is no way to link prices or exchange rates to a token that doesn’t trade, precisely because there is no way to know what it actually sells for.” 

The lack of important infrastructure or any kind of investment signals for Atapirire is also regarded as an indication that the government of Venezuela’s grand crypto plan is all bluster. 

Francisco Monaldi, a Venezuelan professor at Rice University of Latin American energy policy said that: 

“There is no investment plan for this area and no reason to think it would be developed before other fields with better conditions.” 

Going back to Atapirire, there is hardly any sign of either Petro or Oil production. Projecting beyond 5 billion barrels of crude oil that purportedly form the whole basis of Venezuela's Petro-led future, no one appears to know the reality of what the Petro is or when it will become readily available.