Chavez takes over oil service firms

Source: UPI

CARACAS, Venezuela, May 9 (UPI) -- Venezuelan President Hugo Chavez has ordered troops to take over companies that provide services for the nation's oil industry.

BBC reported Saturday that the state oil company seized supply boats and two U.S.-owned gas facilities.

"This is a revolutionary offensive," Chavez told workers near Lake Maracaibo, Venezuela's main oil-producing area.

Venezuela's main oil assets were nationalized about two years ago. The latest move comes amid falling oil prices, which have put a squeeze on government coffers.

Read more: http://www.upi.com/Top_News/2009/05/09/Chavez-takes-over-oil-service-firms/UPI-43991241891300/

anyone surprised?

If only Barack would do that, we'd see the change we voted for. Tax all those over 2 million at 90% and put ALL of that into the Social Security fund.
You know, the one that all the politicians loot and have since WWII. Free health care and the finest in the world. No more "exceptionalism".
Put EVERYBODY that is guilty of war crimes in prison, including the corporate media that lied us into these wars.
I want Peggy Noonan in a 6x9 and I'm just going to "walk on by".

Death to capitalism!

We should be jailing bankers and financiers responsible for our current economic woes, not give them money!

Human Rights Problems In Latin America Come to An End! HRW Finally Able To Focus Attention on Weak Judiciaries, Proliferation of Public Television.

I guess it's no surprise that Human Rights Watch chose to make Venezuela the subject of it's longest Latin America report ever. Judging from the performance at the National Press Club last Friday, journalists just aren't that interested in nuanced, wonky topics like "death squads," "mass-graves" or "Presidents with direct ties to known terrorist groups." These days it takes a good "weakened institutions and separation of powers" story to really move the newspapers off the shelves.

So you won't find any long, boring descriptions of extrajudicial killings in the 230-page report. Or dreary accounts of cabinet officials involved in kidnapping schemes. Or another tired denunciation of military impersonation of Red Cross officials. In fact, you won't read a single account of torture, illegal wiretaps, or human trafficking in this baby. I for one say good riddance to those pre-9/11 human rights concerns.

These days, the hemisphere's most pressing human rights issues involve a weak judicial system and a president who "routinely denounces his critics." And while the report makes clear that Venezuela "enjoys a vibrant public debate in which anti-government and pro-government media are equally vocal in their criticism and defense of Chávez," it doesn't let the president off the hook for creating more publicly run TV stations, which are a top target of human rights defenders worldwide.

<http://www.borev.net/2008/09/human_rights_problems_in_latin.html>

This is a class conflict between the working class and peasants against the foreign educated elites that exploited them.

It's hard to applaud Chavez for some of the things that he's doing, but I think it's important to keep in mind that he's not a highly-trained, sophisticated, polished politician. He's basically a peasant who finds himself in the proverbial David and Goliath contest, facing off against places like the IMF and World Bank, with all of their slick, Harvard-educated types and their bulging rolodexes of contacts, who play racquetball at their expensive health clubs with the political, economic, and media elites of the developed world. They're a hell of lot bigger and better equipped to influence the media and the policy process than Chavez is, and they don't play fair. Lying, coercion, and extortion are the every day business practices of places like the IMF, World Bank, and the big multinationals. Yet they're going to get a free pass in the world media and come away smelling like a rose, while Chavez is going to get bashed and described as an insane dictator. I wish that he was not doing some of the things that he is doing, precisely because, in so doing, he's playing into the hands of his opponents and giving them grist for their PR mills. And it would be really great if Chavez was astute and sophisticated enough to realize that. Sadly, he's not and he fucks up, but, under the circumstances in which he finds himself... I dunno, I just think it's important to keep in mind the context here. This isn't some polite debating society where everyone plays according to civilized rules; this is a life and death struggle for a whole lot of people who have been criminally exploited, in a contest where the other side will use every dirty trick in the book without batting an eye. Expecting country club salon levels of etiquette and gracious manners is probably asking a bit much.

in a dispute over monies owed to them by Venezuela. PDVSA was trying to renegotiate contracts with oil service companies in the middle of which the companies stopped operating.

So Venezuela is taking over the companies to keep oil and gas flowing.

Serious game of chess those guys are playing.

Unlike some other purported "Chessmaster", who is going for the Miss Congeniality title.

It sure is nice to see a leader flip off his detractors.

And the disgruntled folk in Miami are already detracting away saying Chavez's people are too dumb and stupid to run the service companies thereby output will be reduced. Per Bloomberg: “Petroleos de Venezuela doesn’t have the management and strategic capacity to operate these companies properly,” said Jorge Pinon, a fellow at the Center for Hemispheric Policy at the University of Miami, referring to the state-owned oil company. “You’ll see a substantial drop in oil production.”
http://www.bloomberg.com/apps/news?pid=20601086&sid=aAfcnswHlic8&refer=news


Doesn't faze Chavez one bit.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aAfcnswHlic8&refer=news

your link ?
is broken ?

about the people being hired in similar positions. "He don't know nothin' about pumpin' no gas", to quote them directly.

Too late, mofos! :woohoo:

or just like "racing" your ferrari mouth ?


http://www.liveleak.com/view?i=6b2_1241956161

They form the elites of their own countries, looking down on the rest that are of mixed race or indigenous races.

Of course, if your only Latin American experience is Cancun, then I can understand your ignorant statement.

to try to bring down the Chavez government, and sabotaged the oil refineries' computers, the Chavistas just got in there, rolled their sleeves up and figured out how to put it all back together. They did so very quickly, and saved the economy and the government. So why would this be any different? Motivation is the key. If you are motivated to save a good government, which spreads the wealth around, builds schools and medical clinics for the vast poor majority never before served by government, and creates many new revolutionary and progressive programs, and does so while spurring a phenomenal economic growth rate, with the most growth in the private sector (not including oil) and while socking away $42 billion in international cash reserves for a 'rainy day,' you can learn anything and do anything you have to do, to save that government. The Chavistas believed in themselves, in their leaders and in Chavez's political program. To describe them as stupid or incompetent is to be blind. On the part of fascists, it is wishful thinking. The Chavistas have some of the best thought out economic and social policies in the world. Take their land reform program. They don't just confiscate land and give it to anyone. First of all, they have taken very little private land, and they have compensated the owners if they did. Mostly it's unused government land. Secondly, they put the would-be farmers on a five-year program of earning title to their farms. They must produce food. They are given technical support and loans. But the requirements of the farmers are such that it is very unlikely to become a corrupt porkbarrel land giveaway, such as previous fascist governments had created with no improvement in Venezuela's food self-sufficiency.

Everywhere you look in the Chavez government you see smarts like these at work. Chavez himself is a very smart guy--and a big reader. But he is also surrounded with smart people. It is a stupid and ugly prejudice of the fascist rich that the poor are not competent, are not intelligent and can't get it together to run a government or an oil refinery. It is the fascist rich who can't run things--except into the ground. Look all around us! Who has destroyed our democracy and our economy--the greedy, out-of-control rich! Who loots, 'downsizes' and destroys businesses? Not the workers. Not the poor. Who, in Venezuela, failed to create local manufacturing? Who was even importing machine parts for the oil industry--and letting their country go all to hell, with vast poverty and illiteracy? Who, here in this country, 'killed the golden goose'--with greed, outsourcing, deregulation, vast looting and gouging, war profiteering and criminal neglect of the common good? The poor? Nope, the poor WORK. They do their part. They pay their taxes. They teach. They put out fires. They manufacture products. They sell the products. They pick up garbage. They care for the sick. They waitress and cook and park cars and build houses, and install plumbing and electricity and fix things. It is the rich who are incompetent--except at self-aggrandizement.

This is a portion of one of the many insightful comments on an excellent op-ed by Bob Herbert in the NYT Saturday.

-snip

Whether you'll consider it real I don't know, but how Venezuela dealt with its severe crisis over the past 20 years is a cheerful example. Tonight I heard a brilliant lecture by Venezuela's Consul General, Martin Sanchez. We were spellbound listening to an account of President Chavez's transition from army officer who led a failed coup in 1989 to his present views and position. The vast majority in America think he's a socialist or Marxist, but he's instead a pragmatist -- taking a good idea or offer from anywhere he can find it.

Venezuela was an independent nation in name only, actually dependent on Uncle Sam, Western corporations, and the I. M. F.. When Chavez came to office his country had over 15 percent unemployment but is down to about 7 percent now. To do this he simply had to change the economic structure -- and especially focus more on in-country jobs, industries, and programs. Oil exports had to be made to buy something real -- needed for internal growth. And all this without expropriating anyone's house, second car, or bank account, while building a grass-roots participatory democracy that we should envy. It's worked well enough that Mr. Sanchez says the number repatriating to Venezuela is on the uptick.

If it can happen in Venezuela, it can happen here. We too can let necessity be the mother of pragmatism. We don't have to put up with a stimulus effort that is more interested in saving the bankers than the country. Mr. Obama is making a huge gamble that we can pledge $13 Trillion to recovery (and hope to not spend it all and recover much of what we do spend) -- most of it to the banking sector -- and save the status quo, tinkering a little at the margins to cool out we-the-people and patch the broken system back to the point where the crooks and smart-guys can fleece us again.

— Butler Crittenden, San Francisco, CA

-snip-

http://community.nytimes.com/article/comments/2009/05/09/opinion/09herbert.html?s=3

above from the Voice of America and the op = which comes from United Press Intl.

UPI makes it sound like it's a predatory, evil action.
Voice of American says it was to get the companies working again - to not slow up production.

I think we need to study this and if Voice of American is right and UPI is spinning, it is a classic case of propaganda against Chavez.

I am very worried about the U.S. and Venezuela and Bolivia under this administration. I don't know why they have to keep favoring the rich element and the outsider corporate interests in those countries over the Chavez and Morales leadership and the support they have from oridinary citizens who have little voices. Supposedly, Sec of State Clinton spoke to State Dept employees and May 1 and singled out Venezuela and Bolivia as problem countries. Yes, they are a problem - their leaders are subject to coups from the rich people in those countries and their corporate friends and 'U.S.-Cuban and CIA meddling.

Why does Cheney Administration positons carry over?

Under Cheney, U.S. military bases were built in Paraguay, supposedly to prepare for an invasion of Bolivia. An invasion of Bolivia would help some super rich people take over the area in Bolivia that is the richest in gas, oil, minerals with some of them leading efforts to secede and take the earth resources.

There is something sick going on with the U.S. helping these efforts by the hesitation of spreading fear about the countries. Does it all just prove that barons are the true rulers all over the world?

is still a sewer just as DoJ was before Obama took office. It takes time to clean house.

Clinton is playing catch up and she isn't helped by the Bush leftovers in the department (nor by her connection to the right wing via her brother's family or the Penn PR whoredom which has made a tidy sum advocating for "free trade" and against progressive Latin American leaders.

and hope the Obama Administration will stop the active undermining of Latin American regimes trying to find news ways to govern people and share limited resources.

We are all going to be struggling with these issues in the future.

How governments can serve the people, above the corporations.

We can no longer afford to bully foreign governments to smooth the path for corporate operations.

other end of this "dispute" over non payment by Venezuela? The UK govt can put them on the welfare roles it seems.

Which should not be surprising. That is what happens when dealing with a socialistic nation. They care about the working man.

Venezuelan companies simply do not pay for services rendered. Anymore, the company I work for demands cash in advance for any service into VZ...it's the only way to ensure that your efforts on their behalf are stolen. And there's its simply not possible to enforce any contractual agreement upon them in the VZ courts.

in one of my IRA mutual funds. Oh well.

If Venezuela's economy is going to be oil-based(and I'm not sure what he's done on diversification, but they're not there yet)than the Venezuelan people need as much of the revenue from that as possible.

Clearly, the U.S. should quietly leave it alone. I know the DLC'ers want a "LBJ sends the Marines into Santo Domingo" scenario, but I think Obama's smart enough to ignore them.

oil services companies should stay out of Venezuela. whats the point of investing time, money, bringing in equipment, boats, tools, parts and support facilities if the government can simply take it. if they dont have the knowledge or means to perform these operations on their own simply take what they need from the companies who came there to work for them...... I fail to see what is so "noble" about this kind of action. seems it`s become more cost effective to simply seize what they need rather than creating their own services industry. just wait for private industry to come in and build facilities, bring in equipment,tools,parts and supplies along with the needed knowledge and expertise, then turn around and say...... your business now belongs to the people! we will pay you what we say it is worth or we will pay you nothing. thank you, you are free to go............ dont sound right to me.....

Is taking the wealth of the nation for the good of the people any less noble than stealing the wealth of our nation to bail out the greedy?

This really is a "which side are you on?" kind of time we're living in, and it's clear that business is not on OUR side.

did not go bankrupt, they did not need money from the government, they did not cause the government to go broke! they DO provide a service that the government and by extension THE PEOPLE need. damn them all to hell for wanting to be PAID!..... OUR government is bailing out the wealthy banks with OUR money! and it`s WRONG!! as I have stated CONSISTENTLY from day 1, posting on DU. ( why am I "marketcrazy" because the market IS crazy!! bad is good, up is down! and fraud is rewarded! stocks are manipulated and that manipulation is supported by the government! where is the "free market"??? not in America thats for sure!! contract law has been thrown out the window and fraud continues unabated..... )

Which was clearly a step intended to destabilize the legitimate, democratic government of Venezuela and provoke a Chilean-style coup. An even I'd expect a right-wing libertarian like yourself to endorse.

The wealth of Venezuela belongs to the Venezuelan people. Is this so hard to understand?

And I'm pretty sure that Chavez will pay people to run the service system under state management. It's not the sort of thing that can be done with slave labor or anything.

just because I question this action you call me a "right wing libertarian"!!! I am a democrat who worked hard to get OUR president elected! just because i will not tow the line on every issue without question does`nt make me "right wing" that comment was uncalled for! welcome to IGNORE!!! have a nice day....................

Someday you'll learn that the market and social justice don't mix.

Or whose labor created the wealth that purchased them.

We can also pretty much assume that any deal pre-Chavez governments made with foreign corporations was theft committed against the Venezuelan working class.

The private sector isn't on our side, imdjh.

Venezuela has the right to keep or sell its oil. It has the right to pump it itself, or hire someone else to do it. It does not have the right to steal the assets of the companies who, whether you approve of it or not, have agreements with the lawful government of that country to be there and who had a reasonable expectation that their assets would not be stolen by their host.

By your logic, the US should seize Citgo assets and nationalize them. And Toyota. And every foreign investor. But the reason that so many foriegn companies invest in the US is because we have laws which protect private property. If Venezuela keeps this up, it will be Zimbabwe soon enough.

Moreover, when we no longer need Venezuela's oil- they will be truly fucked.

The Latin American elites did not get to where they are except by theft and exploitation.

did try to slaughter a sacred cow and that can get you in trouble around here.

I understand what you are saying about the investment that companies make in set up, equipment, manpower, training, upkeep, etc. etc. I don't think it's justifiable for a government to just take them away with no compensation, but usually the companies are making LOTS of dinero and they don't want to share much of it with the host country. This makes for an untenable situation, especially when those companies would like to get rid of their nemesis who runs said country.

Unfortunately, the capitalistas don't usually like to play ball with those who believe in share-the-wealth. So, they do whatever they can to make life miserable for the nationalistas, who in turn, get more pissed because they are being threatened, and so the cycle goes.

It's hard for me to take the side of these oil guys after seeing how deaf they are to the needs of the people who live in the countries from which they are acquiring their riches. So you'll have to convince me that Chavez and the other leaders who want a bigger share for their people are in the wrong on this.

It doesn't take much digging into the history books to see that the U.S. treats Central and South America as if they are wholly-owned subsidiaries of U.S. Corporate Interests. We certainly cannot rely on the corporate media to give us any balanced coverage on this.

I appreciate your comments and your point of view and i do not entirely disagree with your take on this... it is annoying and aggravating to be attacked and labeled for expressing an opinion. as for how i feel about corporatism.. read my sig line.. should make it pretty clear. thank you for your support!

Sometimes expressions of unpopular opinions have a way of bringing out the crazies around here. For some DU'ers it's lockstep group-think, or you're the enemy. I wish it weren't so, but that seems to be the reality.

before they shut down. I don't know how one can be certain that Chavez gave them a reasonable or an unreasonable offer.

pay your electric bill, your power gets shut off. It's not an attempt to destabilize your home or family. But if you don't pay your bills, your stuff gets shut off until you do pay.
What Chavez did was say "I can't pay the bill. So I'm going to take everything.
Chavez was not living up to his end of the contracts that he made with the service companies. Simple as that.
My water got shut off 5 days ago because I couldn't pay. Sold my car to get it turned back on, and prevent my electric and gas from being turned off too.

LOL!

Message removed by moderator. Click here to review the message board rules.

The former owners will be compensated, but probably not as much as they would like. Your car could be seized if you failed to pay traffic tickets too, or if it was caught in a drug bust. I'm not defending Chavez, he doesn't need me to protect him, but I want to point out that this is not simply a theft; and that it is something that governments, including the USA, routinely do for various reasons. The US government is actually doing quite a lot of seizing pursuant to bankruptcies and the economic collapse right now.

But I certainly would agree that one ought to stay out of Venezuela if one doesn't want to play by Venezuela's rules, the same as would apply to foreign investments in any other country.

Using your analogy of foreclosures- what Chavez is doing is Chase Bank "repossessing" your car because Chase is broke, not because you didn't make your payments.

These companies in essence went on strike because they were not being paid by the Venezuelan government under agreements they had with that government. The government's response was to confiscate the assets of the companies. That translates to you seizing your lawn service because you haven't paid him in six weeks and he stopped mowing.

Your notion that these corporations have a right to extort money from the Venzuelan government, and that the Government ought do nothing about it, is observably false. What do you think would happen if US oil firms went on "strike"? Chavez obligations are to the Venezuelan people and the Venezuelan state, not to these companies, who appear to have over-played their hand.

But I don't trust Chavez. He's taking over more and more of the Venezuelan economy. Last time I read they were experiencing food shortages.

was from anti-Chavez media sources (which are the only type we have here in the US).

No one in Venezuela is talking about any kind of increase in the shortage of foodstuffs. While Venezuela has a vast amount of arable land, most of it is owned by foreign elites. Venezuela has to import 80% of its food. Venezuela is taking over idle land owned by the elite and handing it over to farmers to produce food for use by its citizens. Thus the US media is on a rampage saying Venezuela is a poorly managed country with huge food shortages. Pissed off elites running a propaganda campaign.

and US interests second. You have also no reason to trust the leaders of Ecuador, Bolivia, Nicaragua, Brazil, El Salvador, Argentina or Paraguay. They are also putting their own people first for a change.

Trust the BushCo lapdogs in Colombia and Peru, who continue to kill their people, strip mine their country for multinationals and give sanctuary to international criminals.

that says there are food shortages.

http://www.marxist.com/venezuela-struggle-against-food-shortages.htm

both food production and transportation were firmly in the hands of the opposition.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3314134&mesg_id=3314161



Is that the same "oppositon" that wants him d.e.a.d. ?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3611548&mesg_id=3611548

There was a huge spread on the falling cost of corn, wheat and sugar and the rising prices at the supermarkets just last week.

Your double standard is showing.

wish the world would follow his lead.

snip
UK Wood Group seeks compensation
John Wood Group, a British oil services company based in Aberdeen, Scotland, said on Friday, May 08 it was in a strong position to extract compensation after the Venezuelan government seized control of its operations in the country.

Wood Group has a 49.5 percent interest in the engineering firm Servicios de Ingeniería Mantenimiento, Construcción y Operaciones (Simco), which has a 16-year, USD 800 million contract to manage water flooding at state oil company Pdvsa's oil fields at Lake Maracaibo, Reuters reported.

Like other oil services companies, Simco has not recently been paid for its work, after the collapse in oil prices slashed Pdvsa's revenues.

"The contract has been taken over by Pdvsa following the consortium submitting a notice of default due to non-payment and other contractual disputes," a spokeswoman for Wood Group said.

Assets of oil service companies seized in Maracaibo

President Hugo Chávez announced on Friday that the government took over the assets belonging to oil service contractors in Lake Maracaibo, located in north-western Venezuela, based on a law passed on Thursday by the National Assembly. The new law reserves to the Venezuelan state the goods and services of hydrocarbons primary operations.

Chávez said in a nationwide mandatory radio and TV broadcast that his Administration decided to take control of about 300 supply boats belonging to oil contractors.

He claimed that the seizure of assets of the oil contractors will have an impact on the "reduction of oil production costs," and hailed the decision a major step toward socialism.



http://english.eluniversal.com/2009/05/08/en_ing_esp_govnt-expropriates_08A2322055.shtml

Going to cannibalize the infrastructure for parts next.
Should the Dutch royal family show interest in this turn of events ?

I'll give you back the crumb of credibility you deserve.

You don't like whats going on down there do you ?


LOL
You should change your screen name to a more "peoples" friendly automobile if you expect to stand up for the small guy instead of the leisure class which you seem to endorse .

then maybe I'll give you a "crumb of credibility"

that there is a conflict but to never post the resolution.

I'll be watching for that.

:)

to confiscate "property"

btw

Hugo did stack the court not long ago





Thats the other side of the ( Rule by Decree) situation down there mentioned in the original post;
http://www.upi.com/Top_News/2009/05/09/Chavez-takes-over-oil-service-firms/UPI-43991241891300


My article snipit was about the UK firm trying to go the legal route to get compensation.


And that to you is considered a 'non progressive' and ultra right wing nut course of action ?

And as far as the Supreme Court goes, they just issued an opinion against the government last week.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=405x14923

And as I said, I'll be watching for you to post the resolution of this story. Hopefully, you'll even find a more credible source.

just asking

guess it's only okay for the majority as long as you're part of the majority and others be damned

It doesn't even apply. They are guests, not citizens.

And seriously, Chavez's government has a much better civil rights record than ours does. His was among the first in South America, iirc, to send a rep to march in the pride parade, for example.

"the racict" ferrari won't want to respond to links posted by fellow DU'ers from the past

Are these sources up to your standards ?


Chavez appoints official to govern Caracas

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3831852&mesg_id=3831852


"Venezuela needs the price of oil to exceed USD 90 to pay expenses"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=405&topic_id=8855&mesg_id=8855


Venezuela's Chavez pushes through 26 decrees

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=405&topic_id=6762&mesg_id=6762

Chavez asks military, backers to prepare for fight

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=405x10199

are inaccurate.

look no further than Iran to see where this is headed.

Or Chavez, for that matter. He has no small pool of talent to draw from. Latin America is unified in its move to the left.

I think in the long run no good will come of this for the citizens of Venezuela, and will ultimately lead to greater government corruption.

Due to the lack of foreign investment, technology and know how, Iran's oil infrastructure is antiquated and production is falling. Coupled with increased domestic consumption, their oil exports and revenues are falling. This is going to create a financial and social disaster because Iran is very similar to Venezuela in that much of the oil profits go to social programs, especially subsidized gas and food (which in principle is a good thing).

Iran has no small pool of talent either but it was not enough. You really under-estimate how the large oil companies monopolize the talent and technology. They can (and probably have already) bought the best engineers that Venezuela has to offer. There is a reason that countries enter into partnerships with oil companies to find and develop oil resources - they don't have the capital, the expertise or the technology. Especially the capital - how is Chavez going to increase production if all the oil revenue is going to the people? Developing oil fields takes years and billions of dollars - he doesn't have that kind of money. If he scares off foreign investment then he is faced with the same problem that Iran faces.

has been doing good business with China. That's the main reason Hillary Clinton commented that trying to isolate Chavez has not worked. It hasn't.

And there is no indication that foreign investment is being scared off, despite the dire predictions here. Big contracts all over the world are being renegotiated. When Venezuela tries to renegotiate or when a sector is nationalized, it's reported as if it's a stick up. Every time.

or forces "renegotiation" by the threat of nationalization, why is it reasonable to assume that companies would want to invest there?

Venezuela has yet to fail to compensate for a nationalization, doomsayers notwithstanding.

Haven't heard about that yet.

Venezuela Reached Rate Agreement With Ensco -Oil Minister
May 8, 2009

CARACAS -(Dow Jones)- Venezuela's oil minister said Wednesday that Petroleos de Venezuela SA, or PdVSA, has reached a rate agreement with U.S. driller Ensco International Inc. (ESV).

"We have held discussions with oil rig companies and we are reaching agreements with them," Oil Minister Rafael Ramirez told reporters. "...Ensco is one of them," he added.

The minister did not give any specifics on what type of deal the state reached with the drilling firm.

In January, oil workers helped PdVSA seize an offshore drill owned by Ensco after the company halted work following failed talks to settle a receivable balance of $35.5 million.

-By Raul Gallegos; Dow Jones Newswires; +58-212-905-6338; raul.gallegos@ dowjones.com

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200905061435dowjonesdjonline000926&title=venezuela-reached-rate-agreement-with-ensco--oil-minister

May 6 (Bloomberg) -- Ensco International Inc., the U.S. oil driller that operates from Malyasia to the North Sea, said it may have to terminate a contract with Petroleos de Venezuela SA and pursue claims because of $9.8 million in overdue payments.

Dallas-based Ensco said it hasn’t reached any agreement with PDVSA, as the Venezuelan state oil company is known, on the payment delays, in a 10-Q filing with the Securities and Exchange Commission.

“PDVSA subsidiaries lack funding and generally have not been paying their contractors and service providers,” Ensco said in the filing...

http://www.bloomberg.com/apps/news?pid=20601072&sid=agvU8PirtSa8

Someone is not telling the truth. Is it the US company in its SEC filing, or PDVSA?

Your 8 May dating of a 6 May news release from PDVSA has been noted, by the way.

LOL

After rechecking that link, it looks like mine is more current than yours. Too bad we don't have universal health care like Venezuela because you need to have your eyes checked.

A report with a morning timestamp is most likely less current than a report with an afternoon timestamp. However, you obviously understand the concept of dates, since the article date was apparently misrepresented to make it appear current.

But here's an even more current article, submitted for the audience's edification:

May 9 (Bloomberg) -- Venezuelan President Hugo Chavez’s seizure of assets at 60 oilfield service companies threatens to reduce the OPEC-member country’s output.

“Petroleos de Venezuela doesn’t have the management and strategic capacity to operate these companies properly,” said Jorge Pinon, a fellow at the Center for Hemispheric Policy at the University of Miami, referring to the state-owned oil company. “You’ll see a substantial drop in oil production.”

Reeling from a 60 percent plunge in oil prices since July, Venezuela stopped paying some of its service providers last year, prompting many to idle drilling rigs. The seizures may discourage bidders as Petroleos de Venezuela SA, known as PDVSA, prepares to auction rights this year for the so-called Carabobo blocks, Venezuela’s biggest offer of oil reserves on record.

“The future of Venezuelan oil discoveries will probably lay fallow for some time,” said Christopher Sabatini, policy director at the Council of the Americas in New York. “PDVSA doesn’t have the capacity to undertake more exploration and development, and no one is going to be beating down the doors to get into Venezuela in this environment...”

http://www.bloomberg.com/apps/news?pid=20601086&sid=aAfcnswHlic8

will just have to suffer from my utter lack of interest.

implying it's more current than the contradictory report based on ENSCO's SEC filing. It may have been inadvertent, but I doubt it, based on your track record.

So your grand assertion that "Venezuela has yet to fail to compensate for a nationalization, doomsayers notwithstanding" is incorrect.

Just thought that needed to be pointed out to the readers of this thread.

it's still not true. I posted the article as I found it.

Venezuela has yet to fail to compensate for a nationalization.

And my track record for honesty at DU is just fine. :hi:

to grow oil production and revenues. Do you realize that Venezuelan crude oil is heavy and sour - a particularly difficult type to pump and refine? So difficult that even China requires foreign investment and technology to develop their heavy crude oil reserves.

I don't think you fully understand the issue - Chavez's survival depends on growing oil revenues. It is what funds all of his social programs. There is nothing else in their economy that comes close as far as bringing in revenue. Just like Iran, if he drives away foreign oil investment, Venezuela will suffer.

Chavez and Venezuela have not been isolated in any way, as Clinton noted just last week. Chavez has access to all the tech he needs.

Abu Dhabi, Algeria, Iran, Kuwait, among others, have not seemed to slow down foreign interest or investment.

Why would this be different?

There is nothing wrong with nationalization as long as the rule of law is observed, contracts are honored and foreign companies feel they are treated fairly. If oil companies feel that Chavez is an unreliable partner than they will not do business with him. And he cannot modernize and increase oil production without their capital and technology.


Iran is not a very good example - they have not even returned to the pre-revolution production rates of 1979. They are the example of what can happen without foreign investment.

http://www.reuters.com/article/BROKER/idUSL1684472920080116
In a list of foreign investment from the American Enterprise Institute, included is:

* UNITED STATES: at least $3.6 billion
Petrochemical, gas and oil - $3.6 billion
Biggest reported project: $2 billion in 2004 with Foster
Wheeler (FWLT.O) and consortium for development of Iran's first
liquefied natural gas project.

There are many others listed at the link.

I may not be good for small countries but it is a basic fact of life that can't be ignored. Chavez simply does not have the capital or technology to significantly improve oil production. Driving away foreign investment will have the same effect on Venezuelan oil production that it had on Iran's. That is my only point.

Venezuela nationalizes 60 oil service companies

2009-05-09 10:08:18

CARACAS, May 8 (Xinhua) -- The Venezuelan government on Friday started the process to nationalize 60 oil service contractors and place them under the control of the state oil company, Petroleos de Venezuela.

President Hugo Chavez was greeted by workers dressed in red and waving the company's flags on the Lake of Maracaibo in the oil rich state of Zulia, as he toured the newly expropriated installations.

"We are advancing the construction of socialism," Chavez told state television, as he spoke and shook hands with employees. "The profit will now stay with the workers," he added.

Chavez said the takeover would lead to an "around-20-percent" cut in production cost as a result of better management and improved efficiency.

With the move, 300 boats, several ports and more than 8,000 workers will now be absorbed by the state oil giant, according to Oil Minister Rafael Ramirez, who accompanied Chavez in touring around the facilities.

More:
http://news.xinhuanet.com/english/2009-05/09/content_11340494.htm

decry the profit motive all you want, one thing it does do is ruthlessly enforce efficiency.

Corporate interests have done as they like as long as they like and at any cost.

Not any more. The worm has turned.

at the expense of Venezuelans, that implies to me that those companies were ruthlessly efficient. How else could they be sucking the country dry? Right? Money is all they cared about. Well, guess what - money is what Chavez has to care about if he wants to continue to fund his social programs. The only question is, can he squeeze more money out?

and abusing a population as you strip mine their resources is not efficient in any way. It's simply a deferral of cost.

he has to create revenue to improve life for his people. If he doesn't then they will eventually depose him. Watch - when push comes to shove, Chavez will be as ruthless as any capitalist to make money. His survival depends on it.

it was easy when oil prices were sky rocketing and the world was awash with credit and capital. Not now. Venezuela's economy is extremely vulnerable to outside forces. I think you will see the house of cards coming down soon.

lol

And yet another dire prediction!

You may be right. We'll see soon enough. :)

he will have to deal with the consequences of the global recession. My point is that the past is no indication of Venezuelans future - look how drastically things have changed in America. There is nothing to indicate that Venezuela is somehow protected from the global recession.

He's not going to sell the oil cheaper to anyone but his own people, as he buys their favor by selling subsidized gasoline (like Iran does) to Venezuelans, while sticking it to the poor farmers and workers of the rest of the world.

How superior.

And the president can't undo term limits. Only the electorate can via referendum which they did.

You don't pass them when they suit you and undo them when they don't. That's called instability. Instability leads to poverty.

We just had civil rights put to a popular vote in California, a vote which a reasonable person would have more faith in the integrity of the process than one might in Venezuela. It didn't turn out too well.

In 2004 it's possible that a vote to end term limits for George Bush might have passed with a majority. Would that be OK?

and eliminates the referendum as a method of ratification, thereby depriving the people of any say in the direction of their government, it's OK?

Maybe you're right. Maybe voting is bad and should be eliminated completely, just in case the electorate makes the 'wrong' choice.

and extreme poverty by 75%. And that's with constant United States interference. I think they're doing just fine.

And in 2004 we couldn't even manage a clean federal election. There is no comparison.

It's called democracy.

If that is the will of the people, then so be it. I support democracy and the sovereignty of all nations.

should have it? Really? Our Congress is a sewer of corruption and the Senate is completely dysfunctional. And yet, they both have a return rate higher than the old Poliburo, lol. In order to even run for office, you have to be a millionaire.

The question isn't why I accept how Venezuela conducts its government. The real question is, why do you accept the corruption and dysfunction of your own.

Yessir, those boys at Lehman, I mean, Citi, er uh, Goldman, no, ahh, well SOME banks somewhere sometime MUST have been made more efficient by that ruthless quest for profits.

Yes, those well-earned profits coming from your gubmint and mine, via TARP, FED, snark, snip, snap and any other acronyms one can think of. GAWD, it's AMAZING how efficient the private sector is, ain't it?

that's the only efficiency I am talking about. Chavez thinks he can wring even more revenue and profits - I have my doubts. Money is the bottom like - ever increasing social reform and subsidized necessities requires ever increasing revenue.

Chavez has shown the same weakness as all those corporations you rightfully condemn - short term actions with short term results. He knows that the Venezuelan people expect quick results - they will turn on him if he can't deliver. Iran serves as a valid warning of the potential long term results of driving away foreign oil investment.

You do understand that Lehman simply doesn't exist any more? That we have given and guaranteed $2.2 TRILLION so far just to cover their (and their partners in crime) immediate shortfalls?

Under your definition, apparently, armed robbers are very efficient at extracting profits and revenues as well.

Need to look up the definition of voluntary exchange, please. Crony capitalism and crisis capitalism, which is what we're practicing right now in the US, is good at stealing money from me and you and giving it to those who would fail under any other scenario.

Or you feel that AIG execs really do earn those bonuses they're getting?

Why so many people here fanboi Chavez when he is clearly just a thug who wants to maintain power any way he can. That's why he's changing the constitution, rigging courts and electoral districts, nationalizing the businesses of anyone who doesn't agree with him, and generally using the powers of the state to go after his political opponenets. You folks know if Bush had done the same you would have been the first to whine so why not be consistent, like I am, and admit that what is bad for one side to do is bad for the other? I think there are a lot of centrist democrats like myself who feel this way and would rather see the rule of law respected then just cheering a guy because he is a leftist.

who know that everything you just posted is right wing nuttery and has nothing to do with reality in Venezuela? Just a wild guess.

--but it can be extracted with education. try it some time.

..there are so many people fawning over Chavez it's just sickening. Chavez, Castro, and others of their ilk are enemies of liberty; period. It's ironic to me that the totalitarian left is as bad as the theocratic right in their desire to have their lives controlled by others.
Venezuela is now a hotbed of corruption with a complete black market economy started because of Chavez's nationalization of everything.

:rofl:

corporations run his country.

I don't feel like paying my bills so I just nationalize the companies I owe money to.