Wednesday, May 2, 2007

"Back to the Future?"

. Wednesday, May 2, 2007

In a world in which the prevailing trend is to bend over backward to attract foreign direct investment, Hugo Chavez works across the grain by nationalizing the last privately-managed oil field in Venezuela. "The companies ceding control included BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France's Total SA and Norway's Statoil ASA. All but ConocoPhillips signed agreements last week agreeing in principle to state control, and ConocoPhillips said Tuesday that it too was cooperating."

One must wonder what impact this will have on Venezuelan oil output. According to the IHT, "Multinationals pumping oil elsewhere in Venezuela submitted to state-controlled joint ventures last year because they were reluctant to abandon the profitable operations...Since those takeovers, Venezuela's overall output has declined by close to 4 percent, or 100,000 barrels a day, with some companies complaining they have not been paid for the crude they have been pumping. "I expect to see a repeat of that in the Orinoco," he said.

One must also wonder about the underlying motivations--is Chavez is really in this to help the poor, or to help himself?

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"Back to the Future?"
 
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