Chavez and Big Oil Gear Up for Struggle

[cal04]

Source: AP Business Writer

Forcing Big Oil to give up control of Venezuela's most promising oil fields this week will be relatively easy for President Hugo Chavez, but he will face a more delicate challenge in getting the world's top oil companies to stay and keep investing.

If Chavez can persuade companies to stick around despite tougher terms, Venezuela will be on track to develop the planet's largest known oil deposit, possibly to surpass Saudi Arabia as the nation with the most reserves.

If he scares them away, the Orinoco River region could end up starved of the investment and know-how needed to transform its vast tar deposits into marketable crude oil.

On Tuesday, BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France's Total SA and Norway's Statoil ASA will turn over their Orinoco operations to Venezuela's state oil company, Petroleos de Venezuela SA. Chavez, who says he is reclaiming the oil industry after years of private exploitation, is expected to be accompanied by troops and workers clad in revolutionary red amid fly-bys by the military's new Russian-made fighter jets.



Read more: http://www.guardian.co.uk/worldlatest/story/0,,-6596942,00.html

[1932]

1. I just started reading Nick Kozloff's book about Chavez

In the first 8 pages I learned that, between 1994 and 1999, before Chavez was president, PDVSA's (the state-owned oil company) contribution to the government was cut in half. Most of the board members were executives from US oil companies. PDVSA started a private subsidiary that was co-owned by US defense contractor.

[Igel]

10. Yes. Oil prices went down, mostly,

and averaged around $20/barrel. After a brief uptick in 1996, the price plummeted to near $10/barrel at the start of 1999. Since there's a fixed overhead, regardless of price per barrel, and investment's needed to make sure oil continues to flow ... You get the picture.

Chavez has pulled more profits out of PdVSA to fund his social agenda while simultaneously politicizing the state-owned company, increasing the number of employees, and sharply reducing investment. If he really succeeds in getting less investment from the multinationals, he'll find that in a few years the volume of oil PdVSA's producing will drop.

Foreign investment is precisely why Iraq's likely to sign PSA's, as Saddam contracted to sign.

[Judi Lynn]

11. This is horrendous, but completely in keeping with other arrangements we've heard about.

It's just very goddamned dirty, isn't it?

They cut deals which enriched the very tiny few in Venezuela while stealing the country blind. They should be put in stocks and the exploited public allowed to file past to stare at them every day for a year.

[madrchsod]

2. the oil industry has known that nationalization is the "new trend"

in who controls the amount of production. they will cut a deal that will profit everyone

[1932]

3. Nationalization is an old trend.

But industry owned by a state with a government which prevents the US from pulling the strings...that's a new thing.

[murielm99]

4. Big oil and the bushies

will find a way to kill him before they put up with that shit.

I worry about him.

[1932]

5. I don't think they want to create a martyr to unite Latin America against the US

[murielm99]

6. "They" would be behind it,

while creating a convenient fall guy. They would do it without leaving a trail, and without compunction.

[1932]

7. The US wasn't able to cover its tracks in April 02.

I don't see how his death wouldn't make a martyr of chavez.

[Javaman]

8. Venezuela is the second largest exporter of oil to the U.S. from an

OPEC nation. The oil companies will stick around. There is still money to be made there.

If suddenly the oil companies allowed a cut off or slowing of the oil coming out of that country, our current prices at the pump will seem like a whimsical fantasy against what we will be paying in that event.

There would be sudden and pointed wrath by the american public, because you know, a war that is killing hundreds of civilians a day and taking the lives of our soldiers daily, pales in comparison for the morons out there that MUST drive their gas guzzling SUV's.

My head hurts

[conspirator]

9. *UCK the Corporations. They take more than they give.

Venezuela should instead educate their own oil specialists and develop their own technology, even if it takes decades. The oil won't go out of date it will still be there.