Brother, Can You Spare Chavez a Billion?

Now that Chavez has run Venezuela’s oil production into the ground and needs a new cash infusion for his social programs, he is inviting oil companies back in to make investments:

Venezuela seeks oil investment after 2007 crusade

CARACAS (Reuters) – Less than a year after Venezuelan President Hugo Chavez launched a nationalization crusade, the OPEC nation is boosting efforts to bring in private oil investment amid growing energy-sector problems.

State oil company PDVSA may be seeking to stem growing cash flow and operational problems, only months after a wave of nationalizations that drove out two of the world’s biggest energy companies.

I don’t know about you, but he seems a trustworthy sort. I would invest a few billion there.

With heavy contributions to Chavez’s social development crusade draining PDVSA of much-needed investment, the warming to the private sector may signal a call for help.

Market observers say Venezuela’s output is around 25 percent below official production figures of 3.2 million barrels per day, while exports to the United States of refined products tumbled last year amid chronic refinery outages.

This should surprise nobody.

A rapprochement with the private sector will be difficult unless PDVSA pays up debts to partners, offers them more operational control over projects and convinces them their investments will be safe despite repeated contract violations.

Yes, I think those asset seizures are about to come home to roost. The question is, will anyone be willing to invest major dollars there now? I would hardly think so.

6 thoughts on “Brother, Can You Spare Chavez a Billion?”

  1. “Now that we have completed this (nationalization) process we are ready to attract private capital,” he said in a statement.

    LOL! He must be mental. “Now that we have taken your money, we would like to invite you to invest more.” How daft!

    But since you mentioned Chavez, your stalker buddy should be along shortly.

  2. Won’t you love to be able to eavesdrop on the conversation between Chavez and one of the big oil companies? It’s got to be better than Bush asking King Abdullah for more oil…

  3. Chavez best shot for a capital infusion would be from the Chinese — who would probably be glad to diversify their oil investments from Africa, and who could certainly afford to invest billions to give them a controlling influence on some major oil supplies.

    The Chinese would reasonably tie their fraternal investment in Venezuelan oil to a defence treaty giving them basing rights for ships, planes & supporting forces.

    Chavez is stupid enough to go along with this, since he would see this as sticking it to the filthy Yanqi. Of course, when Chavez decided unilaterally to “renegotiate” those oil deals with the Chinese a few years down the road, he might then find that the presence of well-armed Chinese fighting forces on Venezuelan territory would somewhat limit his freedom of action.

  4. kinuachdrach took the words right out of my mouth. China seems the most likely “ally” and/or “infrastructure partner”…today. Absurd.

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