It's a shame that this two bit communist dictator is allowed to continue threatening US, however look at communist Cuba some 90 miles off the Florida coast, and that tyrant remains and that is beyond wrong.
Venezuela oil loss put at $4.5bn
Posted on 06/28/2007 12:43:29 PM PDT by capt.P
On Tuesday, Exxon Mobil Corporation and ConocoPhillips refused to comply with deadlines imposed by Venezuela and its leftist president, Hugo Chavez. The effect of failure of either oil major to sign onto deals that would have imposed significantly tougher business conditions was effectively muted by the apparent willingness of four other oil firms to do just that, however. As such, most analysts did not think the refusal of the two companies to sign new deals would have a major impact on the ability of Venezuela to continue to move supplies from the region.
Oil Minister Rafael Ramirez had previously warned foreign oil companies that refusal to comply with the new deals would result in their expulsion from Venezuela. Petróleos de Venezuela, S.A. (PDVSA) has said that it was taking ownership of both ConocoPhillips’ and Exxon Mobil’s positions in the country. The move leaves the two oil majors’ $17-billion investment in the Orinoco projects in jeopardy of being lost altogether. PDVSA had already taken over operational control of Venezuela's last privately run oil fields on May 1 as part of its nationalization drive.
Although oil analysts don't expect ConocoPhillips' decision to have significant impact on world crude oil supplies or energy prices, Venezuela’s production will likely be directed to other parts of the globe. And while that trend may not be felt immediately, the South American country seems bent on weaning itself from having to sell its oil in America. At this point, they have little choice. That will change over time.
How all of this will affect PDVSA’s U.S. subsidiary, CITGO, is not yet known. But, the spurned oil majors are not likely to go away without looking for compensation and if they can’t get satisfaction in Venezuela, then Houston will be the next best scenario. Venezuela claims that foreign oil firms owe billions of dollars in back taxes. If that stance sounds hauntingly familiar, then that’s because it is the same pry with which Russia’s Vladimir Putin put Yukos to a slow and lingering death, not too long ago.
Anyone who thinks this soap opera is over is not paying attention. Venezuelan oil, representing a huge chunk of America’s current oil imports, is going away. But before that happens, Chavez will have renegotiated this current round of deals numerous times until it is no longer palatable for anyone to do business there.
Exxon Mobil and ConocoPhillips, if the latest reports are indeed true, will be shown to have done the right thing while everyone else is still throwing bad money after good. Of course, it would be far too much to hope that both of these courageous players would show similar intestinal fortitude in Alaska, where billions of cubic feet of (proven) natural gas await production and transportation south to the lower 48. Faced with a far more benevolent (and patient) local government in Sarah Palin and her so-far friendly legislature, all they’ll have to do is dig “it”(*) up and send it south. Sounds simple to me but what do I know?
(*) It: large volumes of enormously (warehoused for thirty years) profitable, domestic natural gas.
Joseph Keefe is the Managing Editor of The Maritime Executive. Reach him after 8 July at jkeefe@maritime-executive.com
Why, we oughtta...! We should...!
Chavez has been visiting the Middle East and Asia. We need to take military action but not against Venezuela. Iran is the key.
None of the content behind the following may be posted at Free Republic (copyright), so here’s the title and link only.
China Seeks Venezuelan Oil After Exxon, Conoco Quit (Update2)
http://www.bloomberg.com/apps/news?pid=20601086&sid=a.xDMUZTWEeI&refer=news
“Oil Minister Rafael Ramirez had previously warned foreign oil companies that refusal to comply with the new deals would result in their expulsion from Venezuela. Petróleos de Venezuela, S.A. (PDVSA) has said that it was taking ownership of both ConocoPhillips’ and Exxon Mobil’s positions in the country. The move leaves the two oil majors’ $17-billion investment in the Orinoco projects in jeopardy of being lost altogether. PDVSA had already taken over operational control of Venezuela’s last privately run oil fields on May 1 as part of its nationalization drive.”
Well for a moment I almost felt bad for both companies but then I remember that they are doing nothing for America by not reinvesting their massive windfall profits of the last two years into refineries or alternative energy. Act like the devil, play with the devil, get burned by the devil. Perhaps these companies may decide to invest 20 B - 30 B in alternative energy which is a great long-term investment and short term builds great PR and most importantly helps America. America is a place of Judas Iscariot’s, selling out souls for 40 pieces of silver. In the end, these people always hang themselves or their enemies do it for them.
You and I think exactly alike. I was just about to start typing the very same thing.
“None of the content behind the following may be posted at Free Republic (copyright), so here’s the title and link only.
China Seeks Venezuelan Oil After Exxon, Conoco Quit (Update2)
http://www.bloomberg.com/apps/news?pid=20601086&sid=a.xDMUZTWEeI&refer=news";
Cause and effect. The US market sells out for hard fast corporate profits to the Chinese, now the Chinese become our direct competitor paying almost nothing in real terms for these assets Conoco & Exxon built. The investment community at the top has become fat, lazy, complacent group of sellouts and is being outperformed by the Chinese. Nice work boneheads. Don’t worry, some of us business people still do long-term forecasting and can be good Americans at the same time.
Well, I’ll be the devil’s advocate here, but it’s worth looking into whole R&D expenses, rather than alternative energy, which, for the life of me, I’d NEVER invest in personally. Would you ask Bumblebee Tuna to invest in Greenpeace?
We’re still paying for the low gas prices of the 90’s, because exploration got scaled back so hard die to smaller profit margins at the time. It will be years before new infrastructure to access more remote sites gets developed at a rate we can live with. Something’s got to give, anyhow.
And think what a blockbuster summer movie it would make.
Boy I hate commies....
Anyone ever wonder why God gave the bad guys all the resources?
“Anyone ever wonder why God gave the bad guys all the resources?”
It’s not that he gave it to them, it’s that they’re evil enough to steal it from others. Was the case in Mexico, the middle east, etc....
The belief in property and in freedom of association is not a concept of the evil. They’re entitled to what you created!?
It's a shame that this two bit communist dictator is allowed to continue threatening US, however look at communist Cuba some 90 miles off the Florida coast, and that tyrant remains and that is beyond wrong.
Venezuela oil loss put at $4.5bn
“Well, I’ll be the devil’s advocate here, but it’s worth looking into whole R&D expenses, rather than alternative energy, which, for the life of me, I’d NEVER invest in personally. Would you ask Bumblebee Tuna to invest in Greenpeace?”
The analogy kind of fits. However, private investors in the information age are building the competing product/market whether big oil decides to or not. A better analogy would be like in the movie Other People’s Money where Danny Devito describes buggy whips and how the last company who made buggy whips was probably the best damn buggy whip maker. Their are many viable options to make our own oil that have been tested and refined for the last 30 years. Right now, the short play looks like big oil is better to invest in refineries and offshore drilling but the long-term forecasting of the alternative market would need to be factored in and bit by bit and big oil will be forced to adopt new technologies and support it of have lots of buggy whips and no buyers.
“We’re still paying for the low gas prices of the 90’s, because exploration got scaled back so hard die to smaller profit margins at the time. It will be years before new infrastructure to access more remote sites gets developed at a rate we can live with. Something’s got to give, anyhow.”
Very true. If I can hire fantastic economists as board advisors for my smaller business to conduct market research and financial simulations then big oil can do the same. To me their strategy suggests milking their market for all it is worth now and figuring out the long-term strategy later. If this is true, this is poor executive management and at this is passed on as pain to all of America.
“Thank you.
That reminds me of some words from my first boss, the profitable small business owner’s son: “Competition is healthy for business.” And it was a reference to domestic competition. The phrase wasn’t original, but it was wisdom. Domestic competition is healthy, in the long run, for business and for our nation.
Those were the days...”
We’ll reclaim those days I am sure. However, it grieves me to know it will probably be our enemies that shake us to our foundation in finally waking up to personal and corporate responsibility.
Maybe because they are more willing to produce them and put them on the market?
I personally believe that effective decisionmaking requires avoiding compromise when dealing with reactions to market forces. From what I can see, your sketch of the larger companies seemingly relying on short-term strategies is dead on. I suppose that the oil companies will invest in alternative energy sources only when there is blatantly obvious economic reason to do so.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.