Posted: Sun Mar 25, 2007 5:30 pm Post subject: Re: Venezuela fears boom may go bust:
Tyler_JC wrote:
Oil production peaked in 1998 and it doesn't seem like they will be able to reach anywhere near that level in the near future. (that massive dip in 2002 was due to an attempted revolution)
Oil extraction (again, oil is EXTRACTED, it is NOT "produced"; oil was produced by Nature/God some million years ago; human beings are unable to produce it, only to extract the existing one... until there is no more available) has peaked in 1998; but you can see a quite stable extraction level since the governent took control of the PDVSA company (that is just after the big dip; the PDVSA directives started a total 90 days strike (including saboting pipelines and the computerized rooms) to try to make Hugo Chavez fall; they failed, and all the PDVSA people that took part in the strike and sabotage were fired and replaced with people in line with the bolivarian revolution; as the PDVSA president said it some months ago: "now PDVSA is red-reddish" ).
Venezuela is not interesed at all in increasing extraction rates; quite the contrary, Hugo Chavez is very aware of PO and knows that the most oil that can be kept for future times, the better.
The planned increase of extraction is quite small, and probably the real goal is actually to have the needed infrastructure in place but underuse it (I bet that once it's in place Venezuela will take the first OPEC suggestion of quota reduction to do it);
the increasing of oil selling to China will probably be done trough redirection of oil previously sold to the USA (some years ago Venezuela had excess of refining capacity in the USA; CITGO was buying oil from non venezuelian sources, reffining and selling reffined gas; no more so, CITGO sold extra reffineries and ended contracts with various pump stations; I bet in the future CITGO will buy more reffineries and pump stations, thus allowing for a decrease of exports to the USA).
There would be also a decrease of the oil sold to Cuba and caribbean countries as Cuba increases the extraction of its own oil; and also the massive energy-saving policies started in Cuba, Venezuela, Nicaragua and other countries will decrease the local need of oil.
So, Venezuela doesn't need to increase the extraction levels; it is even in the best interests of that country to NOT increase the extraction level, or increase the less possible.
Quote:
exports will crash and they will be starved for foreign currency.
When that happens (if it does), it will be several years from now; the regional economic and political integration would have advanced a lot; the big investisments (basic industries, army modernization, medical and education improvements, etc) would have been done, and there won't be that much need of "foreign currency" (there could even be a new hard currency, disputing the dollar and the euro; there are more and more people speaking about the creation of an "american peso", I think it has good chances to happen).
And, more important: Venezuela would still have (thanks to its low or no increase in extraction rates) something that would have become very scarce in the rest of the world: OIL. That ressource will be much more valuable in some years than bunchs of dollars or euros or other "foreign currencies".
A lot of people in this forum are underestimating Venezuela; they are wrong, Venezuela does exactly know what to do for PO; and is doing it.
(about the price of gasoline at venezuelian pumps; it will be increased; it will soon be maybe 20 or 30 cents the gallon
well, it can't be increased by 1000% in one hop, a 200% increase for a first step is more probable. Other steps will follow. A problem of the gasoil being so low is also that an important part of it is smuggled to neighbouring countries, with absolutely no gain for Venezuela)
Joined: Sep 25, 2004 Posts: 4419 Location: Boston, MA
Posted: Sun Mar 25, 2007 6:34 pm Post subject: Re: Venezuela fears boom may go bust:
Oil accounts for 80% of exports, 50% of all government income and 1/3 of GDP for Venezuela. Therefore, Venezuela's economy is dependent on oil.
I don't care how much their domestic economy grows, it's not going to replace oil exports. For the same reason that no matter how hard Lowell tried, it couldn't replace the textile industry and today it is a ghetto.
Chavez is scaring away investment in his country, further isolating the petro-nation's economy. Nationalizing everything means that any growth in Venezuela's economy will have to be home-grown. Multi-national corporations wouldn't dare risk building factories only to have them stolen by Chavez's government.
There's no need to be pedantic, we all know that oil is extracted not "produced" but this fact is so well understood that there is no need to use the "correct" term. The people who are confused about the differences between producing a car and producing a barrel of oil aren't worth talking to in the first place. Sorry, just a side note. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: Jun 18, 2005 Posts: 3765 Location: In a van down by the river
Posted: Sun Mar 25, 2007 7:12 pm Post subject: Re: Venezuela fears boom may go bust:
No need to get snarky. and you are full of crap anyway. The term oil production is perfectly acceptable and in Venezuela the term oil production is more accurate than using the term extraction.
They extract heavy sour and through an energy intense process produce oil. And it is your opinion that Hugo will be able to create his workers paradise without oil. Yeah, right.
Posted: Sun Mar 25, 2007 7:55 pm Post subject: Re: Venezuela fears boom may go bust:
Considering old Hugo just signed a series of agreements with China for oil extraction/production/refining/shipping - I'd say he's working to diversify his customer base as any good CEO would do. He may be a lot of different things to a lot of different people, but at least he's smart enough not to rely on a country like the USA as his primary customer.
I think as others have pointed out - eventually the world is not going to tolerate a country with 6 percent of the population using 25 percent of the oil. (A BIG) War is inevitable.
Posted: Mon Mar 26, 2007 6:31 am Post subject: Re: Venezuela fears boom may go bust:
Tyler_JC wrote:
Chavez is scaring away investment in his country, further isolating the petro-nation's economy. Nationalizing everything means that any growth in Venezuela's economy will have to be home-grown. Multi-national corporations wouldn't dare risk building factories only to have them stolen by Chavez's government.
There are some US companies that decreased their investments in Venezuela (but still the total amount of US investments increasead); but there are also a lot of new investors; there are joint companies made with Iran, Russia, China, Brazil, Cuba and others.
There is no shortage of foreign investment; there is a great increase in infrastructure building.
And Venezuela isn't "nationalizing everything", only basic industry companies that are strategic and were previously state owned.
And also industries and lands that are stopped and not producing, those are indeed expropriated (with just indemnization to the owners). But a privately owned company that is producing and respecting the law is not at risk.
Posted: Mon Mar 26, 2007 7:59 am Post subject: Re: Venezuela fears boom may go bust:
Eli wrote:
I misspoke-I meant to say that we will see their oil production start to slide. And there is already a precedent set by the likes of Mexico that shows state owned oil companies do not preform as well as professional private oil companies.
The problem is in state owned oil companies like Venezuela they tend to suck off all the profit for social programs in exchange for things like maintenance and exploration. Governments are great if you want to produce bureaucracy and waste they are not so good at producing oil efficiently.Hugo will end sucking the profits out of the oil production to build his new pet social project.
The Venezuelan oil infrastructure will begin breaking down shortly.
Posted: Mon Apr 02, 2007 1:21 pm Post subject: Re: Venezuela fears boom may go bust:
Quote:
The Venezuelan oil infrastructure will begin breaking down shortly.
This sounds more like a threat. Breaking down like Iraq's oil infrastructure broke down, is what this sounds like... Bombs and embargos. The US makes sure the concept of oil money going to the general populace never works.
Joined: Mar 02, 2006 Posts: 1194 Location: England
Posted: Tue Apr 03, 2007 1:23 pm Post subject: Re: Venezuela fears boom may go bust:
Quote:
Wiki: It is estimated that at least 66% of the world's petroleum reserves are preserved in oil sand form, with 32% (270 km³ or 1.7 trillion barrels) of oil sand deposits coming from Athabasca and 34% (286 km³ or 1.8 trillion barrels) from Orinoco.
The world will need that gloop one day ... and the technology will be developed as soon as its needed.
Forget Chavez: Venezuela will be famous - and important - for a long time to come, irrespective of who runs the country. _________________ Technology will save us!
Posted: Tue May 01, 2007 1:31 am Post subject: Venezuela 'to withdraw from IMF'. Ecuador may follow
Chavez is showing the world that not everyone needs Uncle Sam anymore.
oh oh.
Quote:
Venezuelan President Hugo Chavez says he wants to pull his country out of the International Monetary Fund and the World Bank.
In a speech to mark 1 May, Mr Chavez said he wanted the move to take effect as soon as possible.
President Chavez also announced an almost 20% increase in the minimum monthly wage.
"We don't need to be going up to Washington... we are going to get out," Mr Chavez said.
"We are going to withdraw before they go and rob us," he went on.
The president said he had ordered Finance Minister Rodrigo Cabezas to begin formal proceedings to withdraw from the two international bodies.
Mr Chavez said Venezuela would seek repayment of money owed to it by the IMF and World Bank - presumably a reference, correspondents say, to contributions which member countries pay.
"We still have a few bucks there," he said.
President Chavez has spoken of his ambition to set up what he calls a Bank of the South, backed by Venezuelan oil revenues, which would finance projects in South America.
Ecuador, led by another left-wing president, Rafael Correa, has also spoken of leaving the IMF, and recently expelled World Bank representatives from the country.
Posted: Tue May 01, 2007 2:09 am Post subject: Re: Venezuela 'to withdraw from IMF'. Ecuador may follow
Yeh and he is doing it by buying off the loans, not cancelling them.
Good for him. IMF has helped rape and pillage the economies of the developing world. Its refreshing for them to get the ocassional F.U. now and then. _________________ UNplanning the future...
http://unplanning.blogspot.com
Posted: Tue May 01, 2007 10:36 am Post subject: Re: Venezuela 'to withdraw from IMF'. Ecuador may follow
The developing countries are some of the last places on the planet that have excess resources to sell.
Thanks to the current commodities boom, a lot of countries are paying off their IMF debts. And once you have that monkey off your back, why would you ever want it back. I think the IMF is going to be seeing a lot more in the future
btw, a shortfall in interest payments is one of the reasons why the IMF wants to sell off its gold stores _________________ Angry yet?
Joined: Oct 03, 2004 Posts: 515 Location: Washington State
Posted: Tue May 01, 2007 2:04 pm Post subject: Re: Venezuela 'to withdraw from IMF'. Ecuador may follow
I think Chavez will discover the IMF and world bank are like the Eagles Hotel California ...you can check out any time you want, but you can never leave. _________________ This is where everybody puts profound words written by another...or not so profound words written by themselves
Highlander 2007
His plans would also increase presidential control over Venezuela's municipalities and states.
Mr Chavez has rejected criticism of the proposals, saying they would bring "new horizons for the new era".
Other changes include:
Removing term limits for the presidency, and extend the term of office from six years to seven.
Bringing in a maximum six-hour working day.(There ya go! Pander to that power base!)
Strengthening state economic powers, allowing the government to control assets of private companies before a court grants an expropriation order.
Chavez said the constitution would also merge the different branches of the armed forces to consolidate control.
Good move! Better to keep an eye on 'em that way! _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Last edited by Zardoz on Thu Aug 16, 2007 12:23 am; edited 1 time in total
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