The oil worm turns on Hugo Chavez

[REWahoo]

Pardon me while I gloat a little...

CABIMAS, Venezuela – Squeezed by slumping crude prices, Venezuela is reaching out to the multinational oil companies it once demonized as imperialist profiteers.

Venezuela is soliciting bids from the world's major oil companies to extract heavy crude from vast deposits in its Orinoco River region. Despite President Hugo Chavez's criticism of U.S.-style capitalism, it has become clear that state-owned Petroleos de Venezuela SA needs both the cash and expertise of Big Oil.

These international oil companies have made windfall profits in recent years, but analysts doubt many will want to invest again given Chavez's history of seizing foreign stakes in Venezuela's oil.

Venezuela seeks investments from Big Oil

 

[saluki9]

Sadly the oil market it so slow I'm afraid somebody might just show up for this.

 

[Nords]

Pardon me while I gloat a little...

I hear that other towns in south Texas are facing the same conundrum!

Thomas Friedman's "Hot, Flat, & Crowded" claims that cheap oil is the best method for regime change, less authoritarian government, and more women's rights. He thinks the tipping point is $20/barrel.

In a seemingly unrelated coincidence, the newest driver in our house also feels that cheap gas has greatly improved her opportunities for regime change, less authoritarian rule, and better women's rights...

 

[lets-retire]

I think your correct someone will show up. If any of the companies that got burned show up, I'll have serious doubts about the sanity of their leadership. Since OPEC has steadily been cutting output in unsuccessful attempts to stabilize prices, I doubt drilling in Venezuela would really help that country much. It seems all it would do is lower the price per barrel adding to the problem.

 

[MichaelB]

Pardon me while I gloat a little...

CABIMAS, Venezuela – Squeezed by slumping crude prices, Venezuela is reaching out to the multinational oil companies it once demonized as imperialist profiteers.

Venezuela is soliciting bids from the world's major oil companies to extract heavy crude from vast deposits in its Orinoco River region. Despite President Hugo Chavez's criticism of U.S.-style capitalism, it has become clear that state-owned Petroleos de Venezuela SA needs both the cash and expertise of Big Oil.

These international oil companies have made windfall profits in recent years, but analysts doubt many will want to invest again given Chavez's history of seizing foreign stakes in Venezuela's oil.

Venezuela seeks investments from Big Oil

Venezuelan petroleum will be around long after HC is just a memory. US companies will be there for sure, because there are too many other int'l competitors ready to invest.

Venezuela's problem now is not just capital - they no longer have any serious capability to develop or manage the resources on their own. PDVSA was a world class petroleum company just 10 years ago, and now a place full of thugs, party members and their families, other idle and otherwise unemployable socialist ideologs - and lots of cubans. It is an unbelievable example of how easy the reverse midas touch is (turning gold into $hit)

Michael

 

[brewer12345]

Venezuelan petroleum will be around long after HC is just a memory. US companies will be there for sure, because there are too many other int'l competitors ready to invest.

Venezuela's problem now is not just capital - they no longer have any serious capability to develop or manage the resources on their own. PDVSA was a world class petroleum company just 10 years ago, and now a place full of thugs, party members and their families, other idle and otherwise unemployable socialist ideologs - and lots of cubans. It is an unbelievable example of how easy the reverse midas touch is (turning gold into $hit)

Michael

Exactly. I will further add that PDVSA would have run into trouble even with $150/bbl oil because none of the money it produced was plowed back into exploration and production, very necessary to sustaining production over time no matter how much you have under the ground.

 

[ziggy29]

Something about burning bridges comes to mind here. I smell sulfur.

 

[REWahoo]

I smell sulfur.

El Diablo maybe?

 

[hankster]

Hugo is a whack job May his troubles be many.

 

[RonBoyd]

Oil price weakness pressures Iran, Venezuela: CIA

Hayden said a $40 oil per barrel oil price would translate to about $30 per barrel for the high-sulfur grade Venezuela produces. "That's real trouble for that (Chavez) regime -- so you could see a lot of fracturing there," he said.

OPEC may trim supplies more, ignore low price calls

“They are making announcements of oil cuts in the hope that prices will go up, but they should understand the world economy needs a break from high oil prices,” Richard H. Jones, the deputy executive director of the International Energy Agency, told the Petrotech petroleum conference in New Delhi today. The Paris-based agency advises 28 oil-importing nations on energy policy.

Venezuela Begins Stealth Devaluation After Oil Price Plunge

“What’s essentially going on is a surreptitious devaluation,” said Russell Dallen, head trader at Caracas Capital Markets, a unit of BBO Financial Services Inc., a Caracas-based brokerage and asset management company. “They’re pushing more people into the unofficial market, so that’s forcing a devaluation on more people.”

The above links provided by The Oil Drum: Discussions about Energy and our Future Blog.

 

[bssc]

Besides Iran and Venezuela, Russia is going to be severely impacted since their current boom is driven by oil.

 

[MichaelB]

Venezuela’s real problem is not petroleum, it’s the lack of job creation. Many global businesses either reduced their scope or abandoned the country over the past decade due to the hostile business climate or security concerns, undoing decades of economic development. This past decade was the time of the emerging economies, but Venezuela actually regressed. The spike in prices hid this, and there is now little to fill in the gap of decreasing petroleum sales.

Now there will be real pain, widely shared. Chavez will not leave easily or quickly. It’s going to get real ugly.

 

[RustyShackleford]

Thomas Friedman's "Hot, Flat, & Crowded" claims that cheap oil is the best method for regime change, less authoritarian government, and more women's rights. He thinks the tipping point is $20/barrel.

I like Friedman, he's one smart mofo - one of the most articulate and
intelligent voices on the whole energy issue. And yes, these falling
oil prices are really putting the hurt on some very unsavory regimes:
not just Hugo, but Putin, Iran, the list goes on.

But it's interesting that I heard him a few years ago, before the big oil
price spike last year, saying that he really hoped oil would surpass
$100/bbl, because it would really make us get off our asses (not his
words) regarding alternative energy ...

I guess it cuts both ways.

 

[JPatrick]

I hear that other towns in south Texas are facing the same conundrum!

Podner, Venezuela IS south Texas....

 

[Nords]

Podner, Venezuela IS south Texas....

I guess I should be surprised that it took nearly five hours and 11 posts for that to come up... OTOH it'd certainly simplify the contracting!

 

[Ed_The_Gypsy]

Sadly the oil market it so slow I'm afraid somebody might just show up for this.

And I trust Fidelito will burn them again at first opportunity.

Better they should come to Alberta. I need the work. Besides, Alberta has all the refugees from PDVSA.

El Gitano