Venezuela’s economy failing, plan to seize more foreign assets
Posted by Jonn Lilyea on May 12, 2009
Just as an illustration of how twisted and confusing this whole big government concept is, take a look at Venezuela as it’s run by Hugo Chavez. Last year Chavez seized much of the oil and gas industry from foreign investors when oil was selling at $4/gallon here in the US. Now that the price has fallen to half of that, Venezuela is suffering from that decision according to the Washington Times;
The price of Venezuelan crude has shrunk by 55 percent during the past year, and the debt accumulated by government-run oil enterprise PDVSA has grown by 146 percent.
“The oil price is very low; about half the price we budgeted. That is hard and difficult for Venezuela,” said Mr. Chavez.
The National Assembly passed a law Friday allowing the government to take over oil-service contractors, including several American and British firms that are owed up to a year in back fees.
Last week they seized a Tulsa-based company’s assets in Venezuela;
Petroleos de Venezuela SA, the state oil company known as PDVSA, said Monday it took over three gas-compression facilities from Tulsa-based Williams Cos. on May 8, one more than Williams had previously announced.
PDVSA will absorb 163 workers at the facilities, it said Monday in a statement.
The plants, two of which pump natural gas into the ground to increase oil output, are “associated” with about 500,000 barrels of oil production a day, PDVSA said.
Also last week, the rubber-stamp legislature authorized Chavez to take over more industries in addition to the sugar, milk and lumber industries he’s nationalized since last year.
The 39 companies currently providing services to state-run Petroleos de Venezuela SA will be brought under government control under a resolution that took effect Monday after being published in the Official Gazette, the official Bolivarian News Agency reported.
It said the companies affected include Zulia Towing and Barge Company, Gusteca, Premeca, Seatech, and Terminales Maracaibo. The companies provide transport boats and other oil-related services on Lake Maracaibo in western Venezuela.
Chavez claims that taking over these companies will allow him to cut energy costs – the government taking over industries doesn’t cut costs for consumers, which Chavez should have learned by taking over the oil industry. Of course he blames Venezuelans for the failure of the oil industry to turn a profit, so he fires them and brings in foreign labor;
Mr. Chavez ordered his military to seize paralyzed installations, and he brought in oil workers from India, Libya and Iran to restart drilling rigs and refineries as he fired more than 17,000 PDVSA employees.
While Bloomberg reports that Venezuelan bond prices fall. That should be helpful for the economy – he’ll pay foreigners low wages while Venezuelans sit on unemployment lines. In the meantime, the rhetoric continues. At Flopping Aces, Curt posts a video of Chavez telling a crowd of laborers that “The rich are evil….The rich aren’t human. The rich are animals in human form.”
The way things are going, the only rich in Venezuela will be Chavez and his inner circle. Oh, and did I mention that Hezbollah has a presence in Venezuela? And that presence includes running some of the drug trade in the area?
John said
One theory I read why Chavez took over these companies is that his PDVSA owed them so much money that it was easier to take them over than paying their invoices. All of this makes great sense…now he owes himself.
I also read when he took full control of PDVSA it was the brawn whereas when he took over these companies it is the brains.
wayuu said
Chavez espropria tutte le attività energetiche a Maracaibo
VENEZUELA – Chavez espropria tutte le attività energetiche on Maracaibo Lake.
Recent expropriation measures on marine assets in Venezuela
Dal Petrolio al carbone – sarà requisito tutto dal Governo Venezuelano.
Qualche dettaglio in più è contenuto in una newsletter confidenziale circolarizzata dallo Studio Venezuelano dei lawyers Matheus & ULLOA che potete visualizzare al link:
http://piemonte.indymedia.org/article/5157
in 1 attimo il tam tam ha fatto il giro del globo. In fibrillazione i mercati, traders, shipping company, società energetiche, investitori. Tutti. Tranne lui: Il Presidente Ugo Chavez . Che annuncia di aver scoperto il sistema per evitare che imprese straniere possano continuare ad inquinare impunemente il Lago di Maracaibo.
Come? Come impedire la catastrofe ecologica (e fare business)? Come coniugare ecologismo e diritto a rivendicare il legittimo possesso delle risorse energetiche nazionali (gas, olio, carbone etc.)? Ugo Chavez ha trovato la soluzione.
Inquinerà lui.
Ma requisire tutto quello che si muove sul lago di Maracaibo sarà solo la prima fase. Poi …
Se anche voi – come Carbones del Guasare, Anglo Coal, Coeclerici, Carbozulia etc – avete interessi in loco siete avvertiti.
Hasta la vista
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Chavez expropriates all the energy activities in Maracaibo.
Recent expropriation measures on marine assets in Venezuela. From Oil to Coal, will be requirement everything from the Venezuelan Government.
Some more detail is contained in a newsletter circulated by the study of Venezuelan lawyers Matheus & Ulloa that you can see the link:
http://piemonte.indymedia.org/article/5157
in a moment the tam tam has been shown around the world. Fibrillation in the markets, traders, shipping company, energy companies, investors. All. Except him. The President Ugo Chavez. which proclaims to have found the system to ensure that foreign companies can continue to pollute with impunity Maracaibo Lake.
How? How to prevent the ecological disaster (and do business)? How to combine ecology and right to claim legitimate ownership of domestic energy resources (gas, oil, coal etc.)?
Ugo Chavez has found the solution. Pollute it! But confiscate everything that moves on Maracaibo Lake will be only the first step. Then …
If you – as Carbones del Guasare, Anglo Coal, Coeclerici, Carbozulia etc. – have some interests in the region are warned.
Hasta la vista