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To: mgist

Exactly. They just kicked out their primary source of income. The problem is that their own national oil company is incapable of making any money. It has first pick of the prime oil fields, and still they can't even maintain production, or pay their contractors.

You will note in the article that their refineries don't even produce enough gasoline for the country, so they spend the money they make selling crude to buy gasoline. This is the national oil company for you.

The only way they make money, and the only way they are able to increase production, is through concessions to private oil companies, who are only allowed to exploit the lower quality oil fields. And now they've kicked out the main one, no one in their right mind is going to invest any more money trying to increase production in fields that may be taken from them at any time. And no international bank is going to loan them any money until the dispute with Oxy is resolved, if then.

Since they are starved for investment, this will force them into the arms of Chavez, who has gallantly offered to take over Oxy's assets. All the leftists agree that private oil companies that pay their way represent slavery for Ecuador, while Chavez, who will put up nothing, represents freedom.

Trying to build a country when its full of leftists is like trying to swim with an anchor tied around your neck.


8 posted on 05/31/2006 9:12:14 AM PDT by marron
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To: marron
"Trying to build a country when its full of leftists is like trying to swim with an anchor tied around your neck."

HOW TRUE. Time and time again, history has proved that socialism and communism don't work. Ecuador's policies will drive out Foreign Direct Investment (FDI) that so many third world countries compete for an depend on to improve. Many countries that have gone to nationalized oil companies cannot successfully develop their newly found resources or expand production, since FDI stays away. This is happening in Venezuela, and has happened in Nigeria, Saudi Arabia, Iran, etc. Right wing socialism such as Peron's version brought Argentina down from a country with a first world economy to a third world economy that way. The problem is that so many Latin American countries have corrupt government that also harms the economy of the country.
9 posted on 05/31/2006 9:46:13 AM PDT by GeorgefromGeorgia
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