Posted on 03/02/2007 10:02:13 AM PST by Kitten Festival
Energy: Venezuela's Hugo Chavez is spoiling for a fight, but the Bush administration won't give it to him. So now he's trying to provoke U.S. oil firms. This time, he may be in for a surprise.
Even Chavez's own energy officials are getting nervous about the dictator's new bid to start a confrontation with the U.S. through its oil firms.
Last week, for the 10th time, Chavez announced his plan to confiscate four Orinoco Belt extra-heavy-oil projects run by six Western companies — Exxon Mobil, Chevron, ConocoPhillips, the U.K.'s BP, France's Total and Norway's Statoil.
"We are taking back our country," he thundered to the political peanut gallery, preposterously claiming that Venezuela is going to be a sovereign state again.
One of the targets is the vast Cerro Negro project, a joint venture of Exxon and BP with the Venezuelan state oil company PDVSA. It extracts otherwise useless tar sands and converts them into high-grade synthetic petroleum.
It's a "designer" project because it requires lots of high technology as well as high oil prices to produce enough to turn a profit. It's also integrated, and if any stage in the production chain — extraction, upgrading or refining and marketing — is taken out, the economics become questionable.
(Excerpt) Read more at ibdeditorials.com ...
The only question remaining about Chavez is what calibre weapon he will use to shoot his other foot.
Senor Hugo is, apparently, a fan of the new math - whatever that is.
What a magnificent putz.
When this hi-tek stuff starts breaking down,who's gonna supply the technical expertise to get Hugo get back on-line?Where's he gonna get parts?Tehran,NKorea,Havana???
He's been expropriating from 22 energy foreign investment projects for years, and at some point, these companies may get fed up and pull out. If they do, Chavez will lose the oil income that's his source of power. "
Exxon has the chance here to really stick it to Chavez, if they just "walk away" for a few years the oil will still be there when he gets taken down.
Exxon needs to think long term here, I hope they see that a Venezuela without Chavez is worth a small percentage of profit, especially now when they are rolling in money.
He's been expropriating from 22 energy foreign investment projects for years, and at some point, these companies may get fed up and pull out. If they do, Chavez will lose the oil income that's his source of power.
We can only pray....
I'm a slow typer....
Hehehe, GMTA
I can just see these companies putting out a $200 Million bounty on Hugo's head. Or paying a merc unit to protect their property. Maybe they can pay the French for use of the Foreign Legion.
Chavez is bringing a sling-shot to a Big Oil fight.
These companies are there because Venezuela invited them in. Venezuela invited them in because she needed the investment capital, and the technology.
Chavez came into office threatening to nationalize everything, which caused these companies to slow-walk their investments there, until Chavez came around personally and assured them they had nothing to worry about. He's actually had to reassure them several times, which he has done.
His word obviously isn't worth much. He can say he's been honest from the beginning, because he made it plain publicly what he would do. His private reassurances, intended to prevent a flight of capital, haven't been worth the paper they weren't printed on, as it turns out.
He wants to have it both ways. He wants these companies to stay and continue working. But he wants to re-write the contract, and sweeten the government's cut. Its fundamentally dishonest; the agreements were reached when it was uncertain if the processes would work and how well. Now that the money has been spent and the processes proven, he'll increase his share arbitrarily, which is to say, illegally. But thats the beauty of being a dictator with the power of decree; nothing you do is illegal.
Do you really believe that Saudi Aramco or some other firm would not be hired to run the field and keep it producing?
Maybe Castro will give Hugo a Kalashnikov with which to kill himself-ala Salvatore' Allende...
Any clown can run such an operation -- for a little while. And that's why Hugito is going to bite the big one on this; he's thinking VERY short term. V's production is going to go straight in the sewer if ExxonMobil and BP and the boys take a hike. Give 'em 3 years at the outside.
Atlas needs to shrug big-time.
I think you're right, and thats what Chavez is gambling on. The plants are up and running already. That, and since he is not kicking the oil companies out altogether, he's just reducing their share of the take, he's gambling that in the end they'll decide that less is better than none.
The "nationalize" word is just red meat to excite his masses, it doesn't mean much here. What he's really doing is re-writing the contract to reduce the investors share of the take, if I understand correctly. Its not the first time he's done it.
The problem will come when he wants new investment, and he has to sucker in new money. But he figures he'll be able to finesse that problem when the time comes, and he may be right.
Overseas investment is not for the faint of heart. Oil companies have long experience with this kind of thing, but even they can be squeezed. They'll occasionally cut their losses and walk away, but Chavez is gambling they won't.
Hey! I just got 100 gallons of free oil from Senor Chavez just yesterday! No joke - he's giving it away to everyone in Bush Alaska as a "gift" to the people of the United States. In my mind, I know he's a delusional socialist who will eventually bankrupt his country, but in my heart, I'm taking the free oil. I wonder about his game sometimes, but he might just be a crazy dictator. By the way, it was -43.6 degrees outside my house this morning - the oil was used for a good purpose.
My belief is that he's trying to "divide and conquer" by setting off groups against each other - non-Native and Native (since the oil is supposed to be for Native people only), the poor and the rich (by giving away oil to the poor, they'll increase resentment against the rich; the rich will also feel resentment for having to pay for it).
The good news is that most of the Native people here aren't willing to take out the time and energy for the revolution against the evil white oppressor. In fact, most of the Natives here have evil white oppressors as husbands, wives, nephews, nieces, cousins, and relatives. And having lived in Native communities for most of my adult life, I can say with some certainty that simply organizing the revolution won't happen, since the arguments, acrimony, and accusations among the participants will overwhelm anything else. As an example: the free oil vouchers went directly to the local distributor this time around. During the Natives-only free oil giveaway earlier this year, most of the Native corporations couldn't organize handing out vouchers to the satisfaction of Citgo, so this time the vouchers are being handled at the local distributor. I don't think Hugo's revolution is coming anytime soon around here.
Be rather dicey when it comes to maintenance, wouldn't it? How do they propose to fab the control circuit boards w/o a schematic, for example?
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