Chávez reopens oil bids to West as prices plunge

[Psephos]

Source: International Herald Tribune

CARACAS: President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again. Until recently, Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials here have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world's largest petroleum reserves, according to energy executives and industry consultants here. Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.

But the shift also shows how the global financial crisis is hampering Chávez's ideological agenda and demanding his pragmatic side. At stake are no less than Venezuela's economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.

Embracing the Western companies may be the only way to shore up Petróleos de Venezuela and the raft of social welfare programs, like health care and higher education for the poor, that have been made possible by oil proceeds and have helped bolster his popular support.

<snip>

"Chávez is celebrating the demise of capitalism as this international crisis unfolds," said Pedro Mario Burelli, a former board member of Petróleos de Venezuela. "But the irony is that capitalism actually fed his system in times of plenty," he said. "That is something Chávez will discover the hard way."

Read more: http://www.iht.com/articles/2009/01/15/america/15venez.php

[EFerrari]

1. Burelli always seems to be on tap when someone needs a condescending one liner

about Chavez. I just saw him on some PBS hit piece a few weeks ago.

[Psephos]

2. I agree, Burelli is the lazy reporters' go-to guy

Rest of the article is interesting, though. The oil-producers have now effectively switched positions with their customers.

[cstanleytech]

3. I wonder if the oil companies will be stupid and let their greed

lure them into going into business with Chavez.

[dkf]

4. I doubt it. They might as well let the Venezuelan economy collapse

and get Chavez kicked out of office. Makes me wonder if the fall of oil prices isn't some sort of conspiracy to knock the hubris of Chavez and Putin etal.

[Commie Pinko Dirtbag]

10. Translation:

"I hope the companies go against their best business interests in the name of ideology."

[readmoreoften]

5. Well, yeah, DUH. Limited, local socialism would have to do business with global capital.

The only way socialists can stop "doing business" with capitalists would be to--oh, I dunno--rise up internationally. It's kinda hard to pull off.

[Peace Patriot]

6. There's always a bright side to corpo/fascist robbery, looting, firing millions of people,

throwing millions of people out of their homes, destroying the world economy and slaughtering a million people to get their oil. They can dis Chavez, and gloat over the poor of Venezuela, who won't have shoes to put on their children's feet so they can go to school, whose children will lack books and other learning resources, and will suffer malnutrition, whose elderly will lose pensions and medical care, and whose government may have to curtail help to local manufacturing projects, co-ops, small businesses and land reform. Ah, the hilarity of it all! How they relish the notion of hampering Chavez's "ideological agenda"! There is some joy in being greedy shit-heads. It's not all...king is in his counting house/counting out his money. They get to make off with a TRILLION dollars, indenturing U.S. workers and the poor unto the 7th generation and laugh at the skinny street urchins in Caracas trying to sell chiclets or their seester!

:rofl: :rofl: :rofl:

:wow:

--------------------------

But there is something wrong with this article. France's Total, British BP, Norway's Statoil, Chevron and others agreed to Venezuela's terms for oil profits about a year ago. This is not news. The bidding may just have opened, but the arrangements were made in circa Dec 07. I remember this, because Exxon Mobil balked at the terms, walked out of the meetings and went into court in London and tried to grab $12 billion in Venezuela's assets. (They lost in court.) When Chavez entered office, the previous rightwing governments had been basically giving away Venezuela's oil resource to the multinational corporations, in a 10/90 split of the profits favoring the multinationals. Venezuela's oil elite raked off some cream for themselves, and utterly neglected Venezuela's vast poor majority. They were so irresponsible that they were importing machine parts for the oil industry, rather than creating local manufacturing and jobs. The Chavez government has not only reversed all of these egregiously irresponsible policies, it has engaged in several contract negotiations over the years, improving the split to the current 60/40, favoring Venezuela's social programs and economic development. Most of the multinationals agreed. Exxon Mobil went into a snit. They made more money that any corporation, ever, in the last couple of quarters--but they wanted MORE. They wanted to take the food out of Venezuelan babies' mouths. Chavez held firm and told Exxon Mobil to get lost.

In addition, the Chavez government, through good management and wise policies, has put aside $40 billion in international cash reserves. According to Inca Kola news (financial analyst), Venezuela can ride out $60-80/barrel for several years, without touching cash reserves, and with oil lower than that, currently ($40/barrel?), they have considerable flexibility in how to structure use of their large cash reserve to cushion their economy against lower prices. Venezuela is in fact one of the most solvent and responsible governments in the western hemisphere, if not the world. They enjoyed a 4.9% economic growth rate in 2008. They are not desperately opening bidding, just now, to the corporations mentioned in the article. This has been a year long, orderly process, with the terms agreed to, and the corporations now competing for projects based on those terms.

I smell a rat--a lying propaganda piece that creates a false drama--a drama that doesn't exist--to make their own ideological points. They WANT Venezuela to be hurting, and they want YOU AND ME to believe that socialism doesn't work, so they just make shit up. I've seen propaganda like this about Venezuela in the International Herald Tribune before. It doesn't surprise me. Well, yes, it does, in a way. I am always a bit surprised, somewhere in the back of my mind, when journalists lie and twist the truth and bend over for their corporate masters, even though I've read many, many examples of it. It makes me cringe that other human beings, in the once honorable profession of journalism, can sink so low.

This tripe is echoed, nearly word for word, in a NYT article*. I don't know which one produced it. But both of these news organizations lost my respect long ago, on the matter of the South American left.



----------------------------

*(For the NYT url, see
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4831393

[ConcernedCanuk]

7. "a lying propaganda piece that creates a false drama" - From the USSA's media? - can't be!!!

.
.
.

I thought the USSA was the beacon of freedom, fairness and hope.

That IS why they've got their military spread all over the globe, right?

They wanna make sure they are ready to help those in need.

Over Half the World's countries have military presence from the USSA - why are they not grateful?

If China and Russia were decent states,

then they too would invade and occupy a few countries, set up bases and huge embassies to impress us.

AND

if India and Pakistan would do the same,

then a whole lot of USAmericans could go home!

Let's take a load off them poor Murikkkans

[INDIA]

16. How's the Canadian economy doing in the recession? You know...since you were cheerleading

the current economic downturn as the "fall of the US empire" or some tripe like that.

[ConcernedCanuk]

17. "the "fall of the US empire" or some tripe like that" - I ain't the ONLY one watching . . .

.
.
.

Global media with people much wiser than me are writing,

no - not just articles,

but BOOKS about the impending fall of the US "empire".

"tripe" indeed . . .

anyway

in response to your query

"How's the Canadian economy doing in the recession? "

I have no idea

my own is ok - I don't OWN much, but I owe very little

like less than $1,000???

so the world can go bankrupt, I still own what I own.

I live in a small town with rural surroundings and get food/supplies/transportation and so on if I need it

So MY ECONOMY is fine, and more important -

Secure . . .

but I'm lost on the "cheerleading" thing

don't think I got the legs for that

[muriel_volestrangler]

24. The NYT owns the IHT

The IHT is effectively the international edition of the NYT, so you see many identical articles in them every day.

[Flanker]

8. Propaganda

The bidding has been going on for years now, on gas and oil, it has not just magically started.

[robcon]

9. It would be ironic if the oil companies bail Venezuela out...

after having their assets nationalized.

[Bacchus39]

12. indeed, more from the article

"Chávez is celebrating the demise of capitalism as this international crisis unfolds," said Pedro Mario Burelli, a former board member of Petróleos de Venezuela. "But the irony is that capitalism actually fed his system in times of plenty," he said. "That is something Chávez will discover the hard way."



also, export revenue from oil is now over 90%. the dependence on oil revenue has increased under Hugo


"Still, doubts persist over the chances that the new bids, which are set to conclude in June, will ultimately result in finished oil projects. Risks of operating here were underscored again last week when Venezuela ordered new production cuts along with other OPEC members, impacting ventures with private partners.

Under the current bidding rules, the onus for financing the new projects lies with the foreign companies, even though Petróleos de Venezuela would maintain control. Banks might balk at such a prospect. Distrust also lingers in dealing with Petróleos de Venezuela.

"An agreement on a piece of paper means nothing in Venezuela because of the way Chávez abruptly changes the rules of the game," said a Venezuelan oil executive who has had dealings with oil companies from China, Russia and other countries.

"In 10 years, not one major oil project has been built in Venezuela," said the oilman, who asked not to be identified for fear of retribution. "Chávez has left his so-called strategic partners out to dry, like the Chinese, who have been given the same treatment as Exxon."

But the severity of the drop in oil prices may ultimately dictate the terms on which Venezuela re-engages with foreign oil companies.

"Chávez is celebrating the demise of capitalism as this international crisis unfolds," said Pedro Mario Burelli, a former board member of Petróleos de Venezuela. "But the irony is that capitalism actually fed his system in times of plenty," he said. "That is something Chávez will discover the hard way."

[marshall]

11. Live by the oil, die by the oil

When prices fluctuate so much it's not wise to put all of your country's eggs in one basket.

[pnutbutr]

13. Stupid move to invest

Chavez will just kick them all out again when prices go back up. You'd have to be stupid or desperate to invest in Venezuelan oil with Chavez at the helm.

[Bacchus39]

14. yep, or just kick them out once they put in the necessary infrastructure

whether prices are low or high

[Mudoria]

15. They would have to be insane to invest

their money and their shareholders money in projects there.

[Doctor Cynic]

20. Yes, but most boardrooms can't think beyond the next Quarter.

By the time their assets do get nationalized, they will have bailed and cashed their stock options anyways.

[Peace Patriot]

18. There sure is a lot of misinformation in this thread about Chavez and Venezuela.

Chavez INHERITED an economy that was dependent on oil, in which previous rightwing governments were GIVING MOST OF THE PROFITS AWAY to multinational corporations. The oil was nationalized BEFORE Chavez. The government had to power to insure that Venezuelans benefited from their own resource, but refused to use it, and benefited only themselves and rich foreign corporations. Chavez immediately began to work on behalf of the people who elected him to renegotiate Venezuela's oil contracts, to benefit the MAJORITY of Venezuelans--the poor. What better use could these profits be put to, than for schools, medical care, infrastructure development, land reform and other bootstrapping and diversification? He took the BEST POSSIBLE action in the given situation, to benefit all.

Those who condemn Chavez for--or snicker about--Venezuela being dependent on its oil reserves are making a crazy argument, if it can even be described as an argument. Should Chavez just have kissed the behinds of multinational CEOs and handed them the keys to Venezuela?

The U.S./Bushwhacks and their Texas oil men cronies HATED Chavez for this, and proceeded to plot against him, with the local fascist oil elite--resulting in the abortive violent military coup of 2002 (foiled by the people of Caracas and loyal military), a crippling oil professionals' strike (Chavez stared them down), a U.S.-funded Recall election (Chavez won it handily) and numerous dirty rotten schemes to topple this democratically elected government, to this day.

Meanwhile, the Chavez government proceeded not only to get Venezuelans a better deal on the oil contracts, it managed Venezuela's assets so well that it now has $40 billion in international cash reserves as a cushion against the recent Bushwhack Financial 9/11.

Where do WE stand, hm, after 8 years of the oil industry dictating U.S. policy? TEN TRILLION DOLLARS in debt, and counting!

Where do our INVESTORS stand, after 8 years of Exxon Mobil and brethren dictating DE-REGULATION, the outsourcing of tens of millions of jobs, and trillions spent on a corporate resource war? They've lost their shirts. We are headed into a deep depression--with debt up to our eyeballs unto the 7th generation. So, if anybody has anything to invest, after this corpo/fascist-induced meltdown, they would as well invest it in Venezuela, as here, where there is nothing to invest in, except bankruptcies.

South America has now formed its own 'common market'--UNASUR--with Chavez one of the leaders of that effort. The cooperation, integration, social justice goals and independence from the dictation of the U.S. government and our corporate rulers, that UNASUR is aimed at, portends a vibrant future for South America, which not only has the resources--oil, gas, fresh water, forests, minerals and much else--it now has the leadership it needs to create a great economy and society. Chavez in Venezuela, Morales in Bolivia, Correa in Ecuador, Lula da Silva in Brazil, Fernando Lugo in Paraguay and many others represent the ascendancy of leftist "New Deal" values throughout the region. Chavez is by no means alone in turning the tide away from corporate rule to rule of, by and for the people, as it should be. He has many allies. That is the foundation of OUR success. We have lost that democratic, social justice vision that creates prosperity. We have permitted the corporations and the super-rich to loot us blind. South America is showing us the way back to control of our own country. And those who sneer at this, and relentlessly attack it--often by personalizing the matter, to make it seem that Chavez is the only issue--are doing us no favors as to understanding this South American revolution.

And you gotta laugh at their objection to Chavez controlling Venezuela's oil industry for the benefit of Venezuelans, as the corpo/fascists here arrange for our great-grandchildren to pay for the U.S. banking industry's trillion dollar bailout. Socialism for the rich, here. Socialism for the good of the whole, in Venezuela and many other South American countries. The anti-Chavez posters here--with their brief 'hit and run' comments--don't grasp the irony of their point of view, as the U.S. heads for disaster, and Venezuela lands on its feet.

[Judi Lynn]

19. The irony is unavoidable for people with healthy brain function.

There are those who wish to hog it all, to beat down, beat away others who could be helped, and live out the rest of their lives bloated, and bored, hate-filled and suspicious someone might want to deprive them of one last future satisfaction they haven't experienced yet.

Then there's everyone else!

Would not miss one word of your valuable posts. Thanks more than I can express.

[ohio2007]

22. Official tally: 2,165 people were killed in Caracas in 2008 ( misinformation )

Most murders (1,524) took place in Libertador municipality

The official statistics do not include people killed in clashes between rival gangs, crimes of passion or armed showdowns with police corps

According to data gathered last year by the Venezuelan Ministry of the Interior and Justice, Caracas continues to be one of the most violent cities in the world. Some analysts claim that high crime rates in the Venezuelan capital are tantamount to the effects of Hurricane Katrina, one of the hurricanes that have caused the most fatalities and casualties, material losses and destruction ever in the United States.


snip

http://english.eluniversal.com/2009/01/12/en_pol_art_official-tally:-2,16_12A2189617.shtml

Thats more then twice the amount of NATO deaths in seven years fighting in Afghanistan
http://icasualties.org/oef/
and
doesn't even count drug,gang,police clash deaths.

utopia yes

[leftstreet]

23. ...

Thanks to you (and Judi Lynn et al) for your tireless work at keeping the record straight on South America.

:applause:

THE most significant world events are happening in 'those other Americas' and we here in the US are completely ignoring it.

Kudos to all of you!

[ohio2007]

28. thats because some find it so irritating to look at it that way

Venezuela's Chavez says Obama has


"stench" of Bush

http://news.yahoo.com/s/nm/20090117/pl_nm/us_venezuela_obama_1

what?

not getting any ?

[ohio2007]

21. the infrastructure is breaking down.

Must have overlooked that when the pumps were well primed for nationalizing. But what did Hugo do to get Morroco to close their embassy ?

Morocco Embassy in Venezuela closes
http://english.eluniversal.com/2009/01/15/en_pol_esp_morocco-embassy-in-v_15A2193827.shtml

He only encouraged revolution

[muriel_volestrangler]

25. Not 'revolution' - an uprising against a highly disputed annexation

Morocco's presence in Western Sahara is pretty shitty. I'm not surprised Chavez has supported the inhabitants against the incomers. He's not the only one, in words anyway. It's possible Chavez has now given Polisario material support.

The Foreign Ministry said in a statement that the decision followed "increasing hostility by the Venezuelan authorities regarding the Kingdom of Morocco's territorial integrity and recent measures to support (Polisario)".

The ministry gave no details on the new measures taken by Venezuela to back the Polisario Front, which had enjoyed diplomatic support from Caracas even before President Hugo Chavez came to power.

Peacekeepers have watched over Western Sahara since 1991 when the United Nations brokered a ceasefire to end a guerrilla war between Polisario and Morocco, which annexed the northwest African territory in 1975.

The ceasefire terms included holding a referendum to let the inhabitants decide their future but it has yet to take place. Rabat now rules out such a vote and has French support for its proposal for only limited self-rule.

Polisario proposes a referendum among ethnic Sahrawis that would include an option of independence.

No country officially recognises Morocco's rule over Western Sahara and the U.N. Security Council is divided over a solution.

http://af.reuters.com/article/topNews/idAFJOE50F0FO20090116?feedType=RSS&feedName=topNews

[Judi Lynn]

26. A little information can go a long way. Amazing.

From your article, the late-arriving news that not only has this been Chavez' position, but also those who came before him.

Thank you so much for doing the work the reporter and previous reader should have done, as well. A lot of the time key elements are simply omitted. Probably completely unintentional. Yeah, right. Er, right-wing!

Great closer to the article you've shared:

No country officially recognises Morocco's rule over Western Sahara and the U.N. Security Council is divided over a solution.

Morocco's decision to close its embassy in Caracas contrasts with the enthusiastic support for Chavez in the kingdom and other Arab countries over his decision to cut diplomatic ties with Israel over its military offensive in the Gaza Strip.

:woohoo: :woohoo: :woohoo: :woohoo:

[ohio2007]

27. Venezuela's Chavez urges tear gas against protests ( article about uprisings and oil )

CARACAS, Jan 17 (Reuters) - Venezuelan President Hugo Chavez ordered police on Saturday to use tear gas on anti-government protests that block roads, heating up a campaign for a referendum that could allow him to run for re-election.

Venezuelans will vote next month on a proposed change to the constitution that would allow Chavez, a foe of the United States, to seek re-election when his term ends in four years.

In 2007, voters rejected a package of political reforms that would have allowed him to run again for the top office.

snip


Polls last month showed the new proposal had about 40 percent support, although pollsters expect that to rise.Chavez frequently lashes out at opponents and the United States during election campaigns. He tries to motivate supporters with the idea enemies are planning his overthrow.

On Saturday, the leftist leader said U.S. President-elect Barack Obama encouraged Venezuela's opposition to remove him, saying Obama called him an obstacle to progress in Latin America.

http://uk.reuters.com/article/oilRpt/idUKN1731625820090118?pageNumber=2&virtualBrandChannel=0

new whipping boy ?