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The caudillo Chavez has nearly destroyed the PDVSA. When will men learn as Barry Goldwater asked famously?



http//www.rigzone.com/news/article.asp?a_id=31765
I could be wrong, but the concept of peak oil does not jive with this news. I would think that the mentioned possibility of poor management and deterioriation of assets seem the most apparant.

This is inevitable in a totlitarian Collectilvist state. The same thing occurred with Iraq, and when we invaded in 2003, the US was surprised at how badly the oil industry had deteriorated.

Further, if Chavez has really gotten rid of those qualified engineers who did not agree with him, and replaced them with unqualified followers, then Chavez is sowing the very seeds of his own ruin down the road.

Now, can you see this path being followed in Bolivia as well? When the oil industry is nationalized, one can naturally expect it to begin failing, as it has no profit motive anymore.

It will be interesting to keep a close watch on both Venezuala AND Bolivia in the future, in order to see how quickly they manage to kill off the golden goose before they fall by the way side.

And further, how long will it take for the citizenry to forget the lesson learned, and return to the siren's song of Collectivist ideology?
This story may have more to do with political loyalties as opposed to socialism since PDVSA has always been state owned.

They revolted along with the rest of the nation a couple of years ago and Chavez has had to cull the disloyals out,which has harmed production. He's harmful to his people,even those ignorant enough to think he's a good leader.

What an embarrassment to Venezuelans of honor. This caudillo was arrested years ago for attempting to over throw the elected government.
Ok, so it was already state owned. Nevertheless, state enterprises upfront are less efficient. When you add attrition of knowledgable employees with those not familiar with the operation, one is asking for some Serious trouble.

I would imagine that those eliminated employees would be familiar with Preventive Maintenance, and the new ones would not. If a system is not maintained, it will fail. I know from experience, having been a battalion Motor Officer, and later a tank company commander. Machinery requires constant maintenance, or it will not work for long.

I suspect that this is the major problem. And again, I can easily conceive that the "robbing Peter to Pay Paul" effect is in play here. With this, parts are removed from one down piece of machinery to keep another one running. Soon, half the units are 'down' and replacing all the missing parts on the 'down' units is much harder to fix. That is because there are so many missing parts that it is basically good only for complete replacement. I have seen the results of this, and it is not a pretty sight to behold.
Chavez also is giving away the assets of Venezuela to foreigners in an attempt to change geo political considerations.

I wonder how much a poor Chavez supporter wants him to give Bolivia Venezuela's oil in hopes Bolivians will vote for Evo Morales again? I bet the guy would prefer a good job instead.

How long will the insane socialist movement go before those who elected them will revolt at their renewed poverty?
Collectivism is like morphine/Heroine. It has such a sweet promise to the user that he/she is encouraged to partake of it's fruits. Soon the user is hooked and caught in the web.

However, when it no longer can work, and it fails miserably, it is turned upon by the user. Things seem to be on the road to recovery. But the habit has this ability to return, as the addiction still leaves that yearning for the quick fix. So the addict keeps returning to the drug, knowing that this is no real solution, but having no ability to make the 'cold turkey' switch.

I suspect that Collectivist ideology is like that song by Roxy Music called "Love Is The Drug". Just change the name of 'Love' to 'you know what' and there you are.
Collectivism may come in an attractive package, but the content is rotten.

The way the Collectivists have always fought to preserve their sinecure has been to deny the rottenness as it slowly deteriorates into slime. Then after they have no more pretty ribbons and bows to hide behind, they look for someone else's to confiscate as their rightful own.
Yeah, it's always pretty much the same. The NSDAP and Argentina over the Faulkland Islands come immediately to mind. When things get bad, find a scapegoat, and declare it a national emergency, which requires dictatorial powers to protect the populous. Jews, Brits, you name them, they are all evil and a danger to the Collective.
Quote: (..) Mr. Chávez also wants to seize majority control of the four Orinoco projects and force private companies who run them to accept a minority stake, according to a top executive at state-run oil company Petróleos de Venezuela SA, known as PdVSA. (..) The Orinoco plan mirrors the terms of a recent takeover by PdVSA of some 32 smaller conventional oil-production projects previously run by private companies. That effort culminated in the seizure of two fields run by Total and Italy's ENI SpA. Yesterday, Oil Minister Rafael Ramirez said Venezuela has no plans to compensate Total and ENI for the lost fields. (..) If the latest initiative succeeds, it would eliminate the country's remaining privately managed oil fields. (..) "We would like all of the [Orinoco] associations to migrate to mixed companies," said Eulogio del Pino, the executive in charge of PdVSA's relations with private companies, in an interview published Saturday in Venezuelan newspaper El Universal. Mixed company is the government's term for an enterprise in which it owns 51%. (..) But Mr. Chávez has been changing the rules of the oil game since taking power in 1999. In 2001, his government tightened the terms on new investments in conventional oil fields, cutting the tax take to 50% from 67% but raising royalties to 30% from 16.7%, as well as limiting private companies to a minority stake. In 2004, the government unilaterally raised the royalty on the Orinoco heavy-oil projects to 16.7% from 1%. (..) Last year, the Venezuelan leader angered oil companies by ruling that the non-heavy-oil projects signed in the 1990s -- some 32 conventional oilfield deals -- had to retroactively comply with the 2001 law, forcing the companies to hand over a greater share of the profits as well as give up control over the fields.
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Source: WSJ, April 24.



More new support for Rigzone's second possibility.

Iran is also doing bad, the output of their existing fields are currently declining at a rate of 7-8% a year. They are also adding new refining capacity leaving less crude available to export. (Iran is currently a net importer of gasoline.)
Iran is a little different because of international sanctions though. Venezuela should be prospering it seems to me.
Palladin Wrote:Iran is a little different because of international sanctions though. Venezuela should be prospering it seems to me.

Patrick, read my thread on State Control of Resources raises Costs/Lowers Output. the Washington Times article I use, not only covers Venezula, but other State owned oil companies.
John,

OK,it makes sense that it would. However,if North Carolina had huge reserves,why would it not be best for NC to nationalize that asset and sell it for profit to the state coffers?

I'm not advocating it,I just don't understand why it would harm NC is all.
Palladin Wrote:John,

OK,it makes sense that it would. However,if North Carolina had huge reserves,why would it not be best for NC to nationalize that asset and sell it for profit to the state coffers?

I'm not advocating it,I just don't understand why it would harm NC is all.

NC DOES have huge reserves on the coast. Natural gas, Methal hydrates, and quite possibly oil. And NC would be foolish it if could do as you suggest. Why do something, such as this, when you can have someone else do the work, collect royalties, and help the local economy all in one fell swoop?
Also, how would one go about "nationalizing" the oil fields? With a stroke of the pen does the Governor and State Legislature transfer State properrty to the Federal government? Then what does the Fed do? Declare the area a National monument a lá The Grand Staircase - Escalante National Monument (Kaiparowits "monument")?

Whether it is State-owned mineral rights, or Federally-owned rights, the process for accessing any deposits is by contracting to private industry. The surest way to allow this to happen has always been to get the Feds and the State out of the way. This is also Mexico's ultimate solution to prosperity. It was Carter who assured the end of Nuclear power in the forseeable future by an edict that made all efforts to recycle nuclear wastes illegal. The rest of the world side-stepped such a stupid regulation and recycled their wastes easily, making their Nuclear energy programs orders of magnitude simpler than our own.

The way to ease our oil crunch is to relax restrictive environmental whacko strangulation. In other words, get the Feds and the State out of the way, and let Free enterprise save the day.
John,

Royalties to the state are a pittance,I know,I pay them to Louisiana and Wyoming. in 2005,I made gross receipts of $6383 from THEIR gas and oil and in royalties paid them $263 for th4e rights to it.

I don't think you've made the case that the state of NC is better off allowing me to have the resources of NC and in return I give back to the state less than .01 for each dollar I profit.

They both would do well to nationalize the natural resources under their state,imo.
So, you are allowing Statism/Collectivism to influence your ideals patrick. Wink1 Shock

Somehow, I thought you were playing Devil's Advocate.
John,

Instead of just repeating ideological comments,show the board why NC would not do well to nationalize all natural resources? Better yet,show how Texas wouldn't be far wealthier. The coal in Wyoming doesn't belong to North Carolina does it?
Patrick, your point here is not worth arguing. We already have a working Constitution, in which each has a clearly defined role. When each individual state gains complete soverignty, you can bring it up once more.
By the way, Citgo is a nationalized resource. Chavez is the sole owner.
The Venezuela government, run by dictator Chavez, is the sole owner of Citgo gas company. Sales of products at Citgo stations send money back to Chavez to help him in his vow to bring down our government.
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