Hugo Chavez announced last night that Venezuela would withdraw from both the World Bank and the International Monetary Fund. Claiming that Western financial assistance prolongs poverty rather than relieve it, he demanded that the two organizations return Venezuelan assets. At the same time, Chavez has proceeded to seize oil-production facilities from Western corporations, primarily those based in the US:
President Hugo Chavez announced Monday he would formally pull Venezuela out of the World Bank and the International Monetary Fund, a largely symbolic move because the nation has already paid off its debts to the lending institutions.
“We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone,” said the leftist leader, who has long railed against the Washington-based lending institutions.
Chavez said he wanted to formalize Venezuela’s exit from the two bodies “tonight and ask them to return what they owe us.”
Chavez aims to pressure the US out of Latin America — and he has a partner in mind for that project. His seizure of oil-production assets is part of his plan to isolate the US economically, and Chavez wants China to take our place. The Wall Street Journal reports that the self-proclaimed Venezuelan “Maoist” plans to use the seized projects to create a partnership with China to exploit the Orinoco River region (subscription required):
Since becoming president in 1999, Mr. Chávez has tried to use oil as a political weapon against the U.S. In recent years, he has doled out cut-rate supplies to dozens of Latin American countries to buy support. Increasingly, he is using oil to support the U.S.’s economic rivals like China and political rivals like Iran.
In late March, Mr. Chávez unveiled a raft of proposed oil-related deals with China valued at about $13 billion. Under terms of the prospective deals, China National Petroleum Corp. would develop, together with state oil company Petroleos de Venezuela SA, the biggest chunk yet of Venezuela’s Orinoco River region — the same area where Mr. Chávez is nationalizing the Western companies’ projects. Oil produced there would then be ferried to China in a new, joint “super fleet” of tankers, and processed there at three new refineries built to handle Orinoco heavy crude.
The Venezuelan leader’s goal is to supply China with one million barrels a day by 2012, up from 150,000 barrels a day. While many analysts doubt Mr. Chávez’s ability to deliver on his promises, Venezuela’s exports to China have grown quickly, from 12,000 barrels a day in 2003. Meanwhile, with oil production falling and China’s share rising, exports to the U.S. fell 8.2% in 2006 from 2005, and Nigeria has replaced Venezuela as the U.S.’s fourth biggest source of crude oil after Canada, Mexico and Saudi Arabia.
Some analysts believe that Chavez may have reserves in Orinoco that rival Saudi Arabia’s fields. If so, the Chinese have made a valuable partner, and not just strategically. They need a heavy and immediate infusion of oil in order to keep their economic growth, and the capital that the Chinese create with it will benefit Chavez. It could make him the most powerful man in the southern hemisphere and realize his dream of providing an opposite pole from the US in Latin America.
If so, Chavez will have to become more adept at actual production, and these recent moves will not help. With his seizures, he has effectively removed Exxon, Conoco-Phillips, Mobil, Britain’s BP, France’s Total, and Norway’s Statoil — a bit of a surprise, as Norway seems socialist enough to satify Chavez. In their place will come partnerships between Venezuela’s PVDSA and Vietnam, Iran, Brazil, and China as mentioned earlier. He will need the help. Since 1999, production has dropped almost 25% in Venezuela, and unless Chavez can restore production, the Orinoco fields won’t do him or China much good.
PVDSA, in the words of the WSJ, functions more as a poverty-alleviating bureaucracy than an oil-production company. Chavez keeps promising new refineries at home and abroad, but they have yet to materialize. Now that he has chased the proven production capabilities of Western companies out of Venezuela, he may be hard pressed to even meet his current level of production. Chavez also faces another kind of problem in production costs; his oil is more expensive to pump and to refine than Saudi and African oil. If oil prices remain high, Chavez will have money to burn — but if they fall, he will lose his shirt to the Saudis.
Perhaps the US should consider more domestic development simply as a financial cushion against the mercurial Chavez. The more oil we leave on the market, the lower the prices will go — and the quicker Chavez will have to account for his new socialist policies and inadequate talents.
UPDATE: Has even Hollywood given up on Chavez?
Why don’t we use our military to prevent theft of US assets? Surely letting thugs loot billions of dollars from US companies is not in our best interests.
Do the words “United Fruit Company” mean anything? There is no surer way to ensure that Chavez succeeds than to send in the military. What would they do? dismantle refineries and take them to Texas?
The best course is to let Chavez fail on his own. His own people will eventually oust him once things get bad enough. Under socialism, that usually doesn’t require much help.
Ed,
Personally I don’t really care about Chavez, the only reason someone like him rates any recognition is because of our dependence on foreign oil. If his people are happy with him and as long as his dislike for the U.S. doesn’t manifest it’s self in anything more aggressive than in political or economic maneuvering I’d say leave him alone. The U.S. can offset his actions in South America by increasing its economic partnership with the other countries.
Our problem is the gap between our energy requirements and our capacity; this has been and is increasingly becoming a strategic handicap both economically and militarily. This gap is what gives Chavez and others credence. And, while I agree that we need to increase domestic production we should also be pushing as hard as we can to develop alternative energy sources. Developing alternative energy technology might not only remove our dependence on foreign supplies but may even place the U.S. in a position of being an exporter of energy/energy tech. We need a national push for energy independence like we had in the 60’s when we raced for the moon.
Um, shouldn’t Al Gore and the whole Antjropomorphic Global Warming crowd be agitating against this expansion of petroleum usage?
Seems to me that Chavez doesn’t care a bit about the poor little polar bears.
Do the words “United Fruit Company” mean anything? There is no surer way to ensure that Chavez succeeds than to send in the military. What would they do? dismantle refineries and take them to Texas?
No, they’d stop Chavez from using them. Remember, Chavez needs refinery capacity. By stealing refineries he gets that capacity for free. If we use military force to prevent entirely his use of them, his plans utterly fail since he has neither the time nor the money to develop his own.
Claiming that Western financial assistance prolongs poverty rather than relieve it…
Wow. For once, I actually agree with Hugo Chavez.
Aynrandgirl:
“Why don’t we use our military to prevent theft of US assets? Surely letting thugs loot billions of dollars from US companies is not in our best interests… By stealing refineries he gets that capacity for free.”
Chavez is not stealing anything. This is the same line that was used when the power companies were nationalized. AES, the US company that was taken over as a result, was paid 20% OVER market value for its company. Paul Hanrahan, the CEO of AES, said this after the power takeover, “Of all the business we have done in 62 countries, this turns out to be the most beneficial.”
Concerning the oil takeover, Venezuela’s terms are still not as bad as some countries that are allies with the US:
“Despite Chavez’s virulent anti-Americanism and ceaseless talk of “oil sovereignty,” even Venezuela’s tough new terms are better than those offered by other oil-producing countries with closer political ties to the U.S. After all, Venezuela will continue to permit private companies an ownership stake in exploration and production projects — something prohibited by Mexico and Saudi Arabia.”
http://www.usatoday.com/money/world/2007-04-04-venezuela-1b-usat_N.htm
Do you want to send in the US military into Mexico as well?
Also, the expropriations being conducted in Venezuela follow all the appropriate laws. For example, expropriations must be for a public purpose, non-discriminatory, follow all applicable laws, and compensation must be promptly paid, which all apply to Venezuela:
http://www.ftaa-alca.org/Wgroups/WGIN/English/bit_inte.asp
(Section E 2)
Also see section 5a here:
http://www.un.org/documents/ga/docs/51/plenary/a51-394.htm
I guess none of that matters. If the US doesn’t like it, then invasion is the only answer. Right, psycho?
MarkD;
“The best course is to let Chavez fail on his own.”
With the stock market up 150% last year (1), the economies growth rate in the double digits for the past few years (2), unemployment at an 8 year low (3), and foreign investment booming, you might have a long wait for Chavez to fail on his own.
1)http://www.fool.com/investing/international/2007/01/16/the-10-best-places-to-invest.aspx
2)http://www.bloomberg.com/apps/news?pid=20601086&sid=aMes.ytdjv.E”>http://www.bloomberg.com/apps/news?pid=20601086&sid=aMes.ytdjv.E
3)http://www.bloomberg.com/apps/news?pid=20601086&sid=aCwKpgiCRX10&refer=news”>http://www.bloomberg.com/apps/news?pid=20601086&sid=aCwKpgiCRX10&refer=news
Captain:
“Since 1999, production has dropped almost 25% in Venezuela…”
Could I get a source for this? Here are the numbers I find:
1999 2.95 million barrels per day
2000 3.09
2001 3.09
2002 2.66
2003 2.45
2004 2.73
1999-2003 numbers are here:
http://www.sec.gov/Archives/edgar/data/906424/000110465905047833/a05-17375_120f.htm
2004 number is here:
http://www.sec.gov/Archives/edgar/data/906424/000114036106016747/form20-f.htm#i19
As for 2005 and 2006, production has went up in each of those years. Regarding 2005, see “Accounting for Venezuelan Heavy Oil”, Oil Market Report, March 14, 2006. In that report, different guidelines are used for reporting, so their numbers differ from the SEC numbers above, but in relative terms, you can see that production increased from 2004 to 2005:
2001 3.142
2002 2.929
2003 2.652
2004 2.953
2005 3.081
I have also seen increases of 2006 over 2005 numbers. So oil production is equal to what it was in 1999. Please show me where you got your data.
It’s interesting to see how the media treats Venezuela in relation to how well that country is “playing ball” with the IMF. Back in 1996, inflation in Venezuela was over 100%:
http://i6.photobucket.com/albums/y218/oilwars/Image5.gif
Back then, nearly nothing was written about Venezuela’s skyrocketing inflation rate. Maybe this was because they were well incorporated into the US-approved system:
HEADLINE:
Venezuela Gets Big I.M.F. Credit, Backing Market Reforms
(NY Times, July 13, 1996, page 3)
Now, Venezuela is about to put the IMF out of business, and the media talks non stop about Venezuela’s inflation rate, which is close to 20%. That is certainly high, but nothing compared to what it was before Chavez took office (see graph above). The media has a different way of treating Venezuela when they act like a sovereign nation. That damn liberal media.
a better course of action is to compensate any companies that have assets stolen by Venezuela from the sale of Venezuelan assets seized in the US and cooperating companies.
Anyone want to buy some Citgo refineries?
Taking something from somebody without their consent is stealing, no matter how much you pay for it afterwards. If Venezuela allows you to keep an ownership stake, so what? If they can steal 1/2 your property they can steal all of it. As for “20% over market value”, market value as determined by whom? Value as determined by the thug who is stealing your property is not the same thing as value determined by an arms length negotiation absent coercion.
Aynrandgirl:
“Taking something from somebody without their consent is stealing, no matter how much you pay for it afterwards.”
States can legally (see my links) take over businesses or property if they follow the rules. It is not stealing. It is completely legal. The US government can take your house by force (private businesses can as well), as long as they pay you for it. It is legal here and in Venezuela. Legal.
“As for “20% over market value”, market value as determined by whom? Value as determined by the thug who is stealing your property is not the same thing as value determined by an arms length negotiation absent coercion.”
I refer to the value placed on the company by the US stock market. I am sure you agree with the idea that the stock market determines the value of a business. Venezuela paid 20% over the stock market value for AES. If you go to this article…
(Financial Times (London), “Share repurchases can be a good deal Share buybacks are an important investment decision, writes Theo Vermaelen, and relevant to a range of stakeholders” October 20, 1996)
… you will find that the “typical premium” reported by “various researchers” on a stock takeover is “22 percent”. Chavez paid a 20% premium. He’s stealing!!!!!!!!!!
MarkD;
“Do the words “United Fruit Company” mean anything? There is no surer way to ensure that Chavez succeeds than to send in the military.”
You are referring to the US overthrow of democratically elected Arbenz in the 1950’s due to the influence of the United Fruit Company, and suggest that a similar event would lead to ensuring Chavez’ success. I am not sure why you make this analogy. The overthrow of Arbenz certainly did not lead to Arbenz’s success nor the success of Guatemala in general (from the point of view of Guatemalans, at least).
Although the Arbenz overthrow led to over 30 years of dictatorship and the deaths of over 200,000 Guatemalans, it also led to the incorporation of Guatemala into the US-approved global system. From the US point of view, the overthrow was a success. Two hundred thousand lives is a small price to pay for capitalism. I am surprised you don’t want the same for Venezuela.
Mark:
“Anyone want to buy some Citgo refineries?”
Actually, Venezuela is trying to sell some of them. If the US gives him 20% over market value, I am sure Chavez would accept it.
Stop worrying about the price of oil.
Alternatives to oil?
Aren’t any on the horizon, at least none that will replace a good percentage of oil anytime soon. Maybe in 100 years, but no time soon.
Drill more domestically? Not happening. The entire Democrat Party is dead set against it and their moonbat base supports them. Can’t even drill a worthless tundra in Alaska. Thanks, Democrats.
Solution? Buy Exxon stock. Up $.53 today, I make more each month on the stock, than I pay out for gasoline. Then again, I only fill up once a month. Plus, owning Exxon stock upsets Democrats, which is always a good thing.
Not enough $ to buy Exxon? Buy a bike and improve your health.
NoDonkey:
“Solution?…Buy a bike and improve your health.”
Great advice. Also, vehicles like this would help:
http://flytheroad.com/
100 miles per gallon and as fast as a Ferrari.
NoDonkey:
Cars like the one I linked to get their advantages from lithium batteries, which are the next revolution in battery technology for transportation purposes. I looked up where lithium is coming from, and it looks like Chile and Argentina. One way or another, South America has the US by the balls, at least until we learn that our lives have to change.
dave,
I would buy one of these. I do 95% of my driving in the city and don’t need much room. The largest thing I haul (besides me) is a case of beer, and since the car seems to have been designed in the the Netherlands, I’m sure they’ve made enough room for a case of Heineken.
If Chile/Argentina have lithium, than it seems to me they would be big on promoting this kind of car. Seems to me this could be a win-win for everyone (except maybe the oil companies).
The question is – how far off?
I’m not too worried about Chavez. PVDSA was once a world-class organization and is now just a shell of its former self. It’s been in decline since Chavez cleaned out the professionals and replaced them with political hacks. It won’t be too long before Venezuela can’t even supply its own needs. Also, currently outside of Venezuela, only the US and Mexico have refineries capable of processing Venezuelan crude. Unless oil prices sky-rocket to give him leeway, Chavez will destroy the economy of Venezuela before China or anyone else can bring the refining capability online to process the high-sulphur Venezuelan crude.
NoDonkey:
I was thinking of a different lithium car when I compared the acceleration to a Ferrari. The car I linked to has 0 to 60 of 6 seconds. Still not bad. Production is supposed to start in late 2008. Price = $20,000.
This all-electric is coming as well, but I expect price of this to be around 100k. 644 horsepower electric!:
http://zapworld.com/ZAPWorld.aspx?id=4560
On the same site, check out this car. Not great gas mileage, but its pretty cool anyway:
http://zapworld.com/ZAPWorld.aspx?id=308
dave,
Like ’em both.
Give me cheap, safe and reliable, that’s all I need. My VW Jetta is going to last me at least 10 years. I care more about impressing myself over having no car payments, far more than I do over driving around a snob appeal car.
I hope that these cars will be available soon, because I think the market for them is there and it will reduce our oil consumption.
If I didn’t live so close to work, I would have purchased a Prius in order to use the HOV lanes around DC.
“Could I get a source for this? Here are the numbers I find:
1999 2.95 million barrels per day
2000 3.09
2001 3.09
2002 2.66
2003 2.45
2004 2.73”
It looks like you have PDVSA numbers, which the IEA and others believe are inflated:
“The state oil company, PDVSA, reports production of 3.3 million barrels a day. There is no way to independently confirm this, and most outside analysts, including the International Energy Agency, say PDVSA’s numbers are inflated and production is closer to 2.6 million barrels per day. The Financial Times reported this month that Venezuela’s shortfall in production is such that it was actually forced to strike a $2 billion deal to buy about 100,000 barrels per day of crude oil from Russia to avoid defaulting on contracts – a claim the Chávez government says is false.”
And:
“When Chávez came into office in 1999, the country reported production of 3.5 millionbarrels per day”
http://www.csmonitor.com/2006/0531/p04s01-woam.html
DonS:
Yes, I am aware that opponents of Chavez simply say that they are lying. This is standard. In the paragraph you quote, the IEA claims that actual production is 700,000 barrles per day below what PDVSA claims. There is a baseless charge that they are getting 100,000 bpd from Russia to cover the shortfall, but there is no mention where they are getting the other 600,000 bpd.
If what the IEA says is true, at $25 per barrel, PDVSA is coming up 6 billion dolars a year short of what they say they are. SEC reports are audited. If PDVSA does not know how to pump oil, at least they know how to fool the SEC.
The IEA also likes to accuse Venezuela of selling more oil than it says, which shows you where they are coming from. Back in 2005, a database called the “Joint Oil Data Initiative” was started to try to match production numbers to income. The problem was that countries were selling more oil than they claimed to make extra cash while staying within their quotas. Guess who the IEA blamed?:
“Every so often after Venezuela publishes its official oil production data, someone from the country’s central bank calls a colleague at the energy ministry. The conversation generally goes something like this: “Hello, you know the data you have just come out with? You might want to check it again. We have too many dollars in our account, so you must have sold a lot more oil than you say.”
The story makes Venezuelan oil executives, forecasters at the Organisation of the Petroleum Exporting Countries and at the International Energy Agency, the consuming countries’ watchdog, chuckle and nod in acknowledgment.”
Financial Times (London, England)
November 19, 2005 Saturday
London Edition 1
SECTION: WORLD NEWS; Pg. 7
HEADLINE: Oil ministers tackle problem of missing barrels
BYLINE: By CAROLA HOYOS
First the IEA says that Venezuela is producing more oil than they claim, then they say they are producing less. I think that PDVSA is more trustworthy than the IEA. I also think that fooling the SEC out of 6 billion dollars per year is not possible.
Dave = Friends of Chavez fan club.
DonS:
Even if it was true that the PDVSA replacements were not pumping as much oil as the people Chavez got rid of, does that mean that Chavez should not fired the people he did? The PDVSA management organized a lockout (including sabotage of equipment and computers) with the intent of ruining the economy of their own nation in order to create unrest in the hopes of bringing down the democratically elected president. Don’t you think this is grounds for dismissal? Or do you think they should have been allowed to keep their jobs for the reason that replacements might not be able to pump oil as fast? If the leaders of a critical industry in the US shut down operations and sabotaged their own equipment with the goal of screwing up the US economy, hoping to stir unrest that would cause the downfall of GW Bush, would you want those people fired? Even if their replacements might not do the job quite as well? If GW Bush did fire them and put in replacements, would you charge him with installing his “cronies”? I suspect you would not only want the people fired, but put in jail as well. When the air traffic controllers went on stike in the 1980’s, their intent was much more benign than ruining the US economy and causing the overthrow of the president, but Reagan fired them all anyway. Why was Reagan not a “thug”, “tyrant” or “dictator” when he did that?
In the end, it doesn’t matter. The replacements have proved they can pump oil as well as the elites.
“Yes, I am aware that opponents of Chavez simply say that they are lying.”
So, you were not quite truthfull when you questioned the Captain’s numbers.
“SEC reports are audited. If PDVSA does not know how to pump oil, at least they know how to fool the SEC.”
Wiki has this to say:
“On July 28, 2006, credit ratings agency Moody’s Investor Service said it was removing its standalone ratings on PDVSA because the oil company does not provide adequate operational and financial information. PDVSA has still not filed its 2004 financial results with the US Securities and Exchange Commission that were due in June 2005.”
“Even if it was true that the PDVSA replacements were not pumping as much oil as the people Chavez got rid of, does that mean that Chavez should not fired the people he did?”
The wrong people won: Chavez is just another up and coming evil dictator.
“The replacements have proved they can pump oil as well as the elites.”
Either that, or they proved they can lie. And it is easier to lie than to pump oil . . .
“Every so often after Venezuela publishes its official oil production data, someone from the country’s central bank calls a colleague at the energy ministry. The conversation generally goes something like this: “Hello, you know the data you have just come out with? You might want to check it again. We have too many dollars in our account, so you must have sold a lot more oil than you say.”
Perhaps they are lying about financies as well:
“In 2005, we wrote about “Venezuela’s oil receipts,” and the significant questions being raised, including a “shortfall in PDVSA cash deposits to Venezuela’s central bank” of “perhaps by as much as $2 billion.”
The trail of that story grew cold, but the questions did not. In fact, little has changed. In 2005, we reported that the alleged shortfall was “not totally verifiable, since PDVSA has not filed papers with the SEC in at least two years.”
Indeed, no one really knows what PDVSA’s books really hold. As we reported recently, Venezuela is no longer going to report PDVSA’s finances to the U.S. Securities and Exchange Commission. ”
http://www.rigzone.com/news/article.asp?a_id=31765
DonS;
“So, you were not quite truthfull when you questioned the Captain’s numbers.”
The SEC number for 1999 was 2.95 mbpd. This was reported back when the elite capitalists were in charge, so we know that number is accurate. If what the Captain said is true, and production today is down 25%, that puts daily output at 2.21 mbpd. Even counting baseless accusations, I have never seen a claim that low. That is why I asked. Even the IEA claims that they think production is at 2.6 mbpd (I wonder how they come up with these figures…out of a hat?? What facts do they draw upon to arrive at their estimates?). 2.6 mbpd would mean that production is down 12% from 1999. So even an institution that charges Venezuela with both over and under producing at the same time still only claims a 12% production output, so I wonder where the Captain comes up with a 25% reduction. Do you have any idea how the IEA decides how much Venezuela is “really” pumping? Any comment on how the IEA can accuse Venezuela of pumping both more and less oil than they claim at the same time?
“PDVSA has still not filed its 2004 financial results with the US Securities and Exchange Commission…”
They have now. I linked to them. Filing a late financial statement is not as big of a feat as fudging 6 billion dollars without the SEC knowing.
“The wrong people won: Chavez is just another up and coming evil dictator.”
So democracy is not about who wins, it’s about the “right” people winning. If the “wrong” person wins an election, he is a dictator. I get it.
“And it is easier to lie than to pump oil . . .”
It is not easy to slip 6 billion dollars past an SEC audit.
“Indeed, no one really knows what PDVSA’s books really hold. As we reported recently, Venezuela is no longer going to report PDVSA’s finances to the U.S. Securities and Exchange Commission.” -Rigzone, May 2, 2006
When you look at the 2004 SEC report I linked to above, look at the first line:
“As filed with the Securities and Exchange Commission on November 17, 2006.”
I guess Rigzone was wrong about PDVSA no longer filing reports. Another reliable source you have there.
DonS:
“On July 28, 2006, credit ratings agency Moody’s Investor Service said it was removing its standalone ratings on PDVSA because the oil company does not provide adequate operational and financial information. PDVSA has still not filed its 2004 financial results with the US Securities and Exchange Commission that were due in June 2005.”
As I showed, PDVSA has now filed its 2004 results. As a result Moody’s has reinstituted it’s rating on PDVSA:
http://www.eluniversal.com/2007/02/07/en_eco_art_07A833181.shtml
The rating is B1. For comparison, GM used to have a B1 rating, but it looks like it is being downgraded:
http://www.bondsonline.com/News_Releases/news01270601.php
Maybe GM is selling less cars than it claims to be! Maybe you should find better sources than Wikipedia.
Reality check:
“But the truth — one that both Chavez and his archfoe, the Bush Administration, would prefer you not know — is that when it comes to oil nationalization, Hugo is hardly the most radical of his global peers. In fact, even after today’s petro-theatrics, Chavez is just catching up with the rest of the pack.”
http://www.time.com/time/world/article/0,8599,1616644,00.html
The reality is that the oil terms in Venezuela are still more Oil-company friendly than in many other nations. The reason for the hysteria is that the oil companies are used to raping Venezuela, and now Chavez have toned that down to the point where the oil companies instead will only make a hefty profit. I guess he cares about his country in much the same way many American’s care for theirs.
He’s evil!!!!!!!!!!!!!!!!!!!!
Bomb him!!!!!!!!!!!!!!!!!!!!!!!!!
“The SEC number for 1999 was 2.95 mbpd. This was reported back when the elite capitalists were in charge, so we know that number is accurate.”
It is my understanding that Chavez came to power in Feburary of 1999, so the numbers reported to the SEC are his.
Here is this quote:
“When Chávez came into office in 1999, the country reported production of 3.5 millionbarrels per day”
http://www.csmonitor.com/2006/0531/p04s01-woam.html
“If what the Captain said is true, and production today is down 25%, that puts daily output at 2.21 mbpd. Even counting baseless accusations, I have never seen a claim that low.”
Prior to Chavez coming to office, it was 3.5 mbpd. It has now dropped to 2.6 mbpd. That’s a 25.7% drop in productivity.
“Any comment on how the IEA can accuse Venezuela of pumping both more and less oil than they claim at the same time?”
The answer is that PDVSA pumped more than they claimed early in Chavez’s presidency, before he ruined the PDVSA, and they pumped less than they claimed after he ruined the PDVSA.
DonS:
You’re CSmonitor link says that Venezuela reported production of 3.5 mbpd. This is an unsourced figure. Where did it come from? In reality, the oil production that Venezuela reports is what PDVSA reports, and that number can be found in their SEC statement. That number for 1999 is 2.95 mbpd. If you want to compare oil production from one year to the next, you need to compare like to like. Some numbers count heavy oil, some don’t. This issue is even more critical with Venezuelan oil, which is why the Oil Market Report article I referenced is still dealing with the issue of how to report Venezuelan production. The best way to compare numbers is to do what I did, and compare what PDVSA reports to the SEC. If you want to compare unsourced numbers, you can come up with whatever you want. I can look through Lexis Nexis and find 20 different values for each year, especially if I use unsourced numbers from obviously biased articles. Doing so, however, is meaningless.
Can you answer the question I asked earlier? PDVSA intentionally shut down Venezuela’s oil industry with the intent of ruining Venezuela’s economy in the hopes it would lead to the overthrow of the president. Do you think this is acceptable? I am sure you think it was acceptable when it is Chavez that is being overthrown, but not if it was Bush, correct? So what should the law be for other nations? Should all nations other than the US have a law on the books saying that it is acceptable to use any means necessary to overthrow their leader, as long as that is what the US wants? Is this solution? That way, it is still wrong to try and overthrow a US leader or one of it’s allies, but it is OK to overthrow leaders of countries the US does not like. Is that the correct way for things to work? Are you a complete idiot?
“The answer is that PDVSA pumped more than they claimed early in Chavez’s presidency, before he ruined the PDVSA…”
So before the PDVSA was” ruined”, PDVSA was pumping more oil than they claimed, and the extra income from that oil could not be reported, so it went directly into bank accounts of upper level management. This is perfectly acceptable in your eyes, I guess, since it is the capitalist thing to do. To me, to present that as the what it “should” be is rather strange.
The comment makes no sense, however, because the IEA was charging Venezuela with pumping more oil than it claimed in late 2005, long after Chavez had taken over. Sorry, Don.
Rather than trying to use your tortured logic to make some trivial point, can you instead try to address the overall issue? Do you really believe PDVSA employees should have been able to keep their jobs after what they did? Do you really believe that Chavez is doing something illegal or wrong with his new oil terms? Did you read the Time article? Is it wrong to act in your own countries interest? Or do all countries of the world have to act in the interest of the US, or risked being bombed? Is that the world you want to live in?
“The best way to compare numbers is to do what I did, and compare what PDVSA reports to the SEC.”
That’s great, if you like the lies of a banana republic dictator.
“PDVSA intentionally shut down Venezuela’s oil industry with the intent of ruining Venezuela’s economy in the hopes it would lead to the overthrow of the president. Do you think this is acceptable? I am sure you think it was acceptable when it is Chavez that is being overthrown, but not if it was Bush, correct?”
Do you think Chavez is going to face a real election? Or is he going to continue on as dictator?
Bush is leaving in 2008. Chavez is going to be ruining Venezuela for quit a while. And Bush acts in the interests of the US, Chavez acts counter to the interests of Venezuela.
“Do you really believe that Chavez is doing something illegal or wrong with his new oil terms?”
Chavez is a socialist dictator.
“Is it wrong to act in your own countries interest?”
He is acting in his interest, not his countries. He is, in fact, working to ruin his country.
“Or do all countries of the world have to act in the interest of the US, or risked being bombed?”
No one is talking about bombing Venezuela.
And no countries’ self interest lies with socialism.
“The comment makes no sense, however, because the IEA was charging Venezuela with pumping more oil than it claimed in late 2005, long after Chavez had taken over. Sorry, Don.”
Oh? I haven’t seen a source for the “overpumping” claim.
However, your argument is that IEA’s claims are contradictory. Prove it: show that for a given point in time the IEA was claiming both over and under pumping.
“In reality, the oil production that Venezuela reports is what PDVSA reports, and that number can be found in their SEC statement.”
Did you also trust Enron? And the numbers they put in their SEC statement?
“That’s great, if you like the lies of a banana republic dictator.”
I haven’t seen you post before, and initially I thought you were going to be somewhat serious, because you actually brought up a credible source and tried to make an actual point, which is very rare on this site. Now that all your serious attempts at logic have been shut down, you have resorted to stupid comments. Don’t worry, I’m very accustomed to it by now.
“Do you think Chavez is going to face a real election? Or is he going to continue on as dictator?”
Pathetic.
“…Chavez acts counter to the interests of Venezuela.”
Really. How is restructuring the terms of oil deals in a manner that allows Venezuela to keep a fair share of the profits raised from the exploitation of their natural resources acting counter to Venezuela’s interests?
Dave’s question: “Do you really believe that Chavez is doing something illegal or wrong with his new oil terms?”
Answer: “Chavez is a socialist dictator.”
Analysis: You’re an idiot.
“No one is talking about bombing Venezuela.”
Really? See aynrandgirl above:
“Why don’t we use our military to prevent theft of US assets?”
If the US wasn’t busy getting their ass kicked in Iraq, they would have invaded Venezuela a long time ago.
“Oh? I haven’t seen a source for the “overpumping” claim.”
If you could read, you would have seen it. Here it is again:
Financial Times (London, England)
November 19, 2005 Saturday
London Edition 1
SECTION: WORLD NEWS; Pg. 7
HEADLINE: Oil ministers tackle problem of missing barrels
BYLINE: By CAROLA HOYOS
“However, your argument is that IEA’s claims are contradictory. Prove it: show that for a given point in time the IEA was claiming both over and under pumping.”
Your CSmonitor link has the IEA claiming that Venezuela was under pumping their stated numbers on May 31, 2006. My link above has the IEA claiming Venezuela over pumping on November 19, 2005. Here is another quote from the IEA claiming under pumping:
“But today’s official production figure contrasts with every other institution that measures oil market data. According to Opec, the Energy Information Administration and the International Energy Agency, Venezuela’s output in April was about 2.6m b/d and falling.”
Financial Times (London, England)
May 26, 2005 Thursday
London Edition 1
(BTW, it’s interesting how according to the IEA, Venezuela’s production was 2.6 mbpd “and falling”, and now, nearly two years later, it is still 2.6 mbpd. I guess it wasn’t falling that fast.)
So we have this;
May 26, 2005: “Venezuela is pumping less than they claim!”
November 19, 2005: “Venezuela is pumping more than they claim!”
May 31, 2006: “Venezuela is pumping less than they claim!”
Is that clear enough for you? Probably not.
“Did you also trust Enron? And the numbers they put in their SEC statement?”
Yes, it is always possible than a company is lying. But because some companies have lied does not imply that they all do. If that were so, SEC statements would be meaningless and the SEC itself would cease to exist. You simply cannot look at an issue objectively. If you proved a point using SEC statements and I countered them by saying “They are lying and this organization that says they are lying is telling the truth, even though they contradict their own statements and even though I cannot come up with a plausible way this lie could be carried out”, you would think I am nuts. But you do it and you think you are being clever. It’s funny. You are countering audited SEC statements with completely baseless accusations from organizations that obviously have a bias when they are blaming Venezuela for things that clearly contradict each other. I’ll ask once again, where does the IEA get it’s figures from? You cannot answer, because you realize they are simply making up a number out of thin air. In all the articles I have read claiming Venezuela under producing, not a single one produces the tiniest shred of evidence to support it. If Venezuela is producing 700,000 bpd less than what they claim, how are they getting away with it? If they send the US 1.3 million bpd, do they simply short change us and only send 600,000 barrels? Wouldn’t we notice? If countries are getting what they are contracted to get, then Venezuela itself must be absorbing this shortage, correct? But how can that be? Due to Venezuela’s booming economy under the demon Chavez, car sales in Venezuela have went through the roof. And gas still costs about 20 cents. Not a good environment to absorb a 600,000 barrel per day shortage. How in the hell do they do it?
DonS:
So the new terms are that outside companies cannot charge more than two thirds of the value of the oil produced. So if Exxon removes $100 million dollars of oil from Venezuela, they cannot charge more than $67 million for doing so. Does that seem unreasonable to you?
In 2005, PDVSA produced oil at a cost of $4.00 per barrel. The average rate charged by outside companies is $18.17 per barrel.
Some contracts were structured in a manner that PDVSA was actually losing money of the deal. Venezuela was paying outside nations to take their oil. Does that sound reasonable to you?
DonS:
“[PDVSA] said that in order to clear up doubts [concerning oil production], it has invited IEA officials, including Executive Director Claude Mandil, to Venezuela to compare figures.”
AFX International Focus
November 20, 2006 Monday 7:54 PM GMT
LENGTH: 322 words
HEADLINE: Venezuela says IEA output data is wrong
The IEA declined to meet with PDVSA. I wonder why? Why douldn’t they want to try and get to the bottom of this disagreement? Certainly not the actions of an unbiased organization.