Article

2008-02-18 Caribbean-Latin America

Feb. 17 (Bloomberg) -- Venezuelan President Hugo Chavez, who threatened to cut off oil sales to the U.S. a week ago, said the government won't do so unless the South American nation is attacked. ``We don't have plans to stop sending oil to the U.S.,'' Chavez said today in comments broadcast by Venezuelan state television. ``All I've said is that, if the U.S. attacks us, we'll have to decide not to send one drop of oil to the U.S.''

Finally figuring out that he has few other takers for his oil, has he ...

Venezuelan Oil and Energy Minister Rafael Ramirez said Feb. 13 that the country is in an ``economic war'' with the U.S. The world's largest economy is seeking to destabilize Venezuela by backing a lawsuit filed by Exxon Mobil Corp. to freeze assets of state-owned Petroleos de Venezuela SA, Ramirez said.

The conflict stems from a dispute between Exxon and PDVSA, as the state oil company is known, over Exxon's compensation for its stake in a heavy crude oil joint venture that was nationalized last year. Chavez, who has accused the U.S. of trying to undermine his efforts to implement ``21st-century socialism,'' has seized on the Exxon conflict to sharpen his criticism of President George W. Bush. Exxon has won court orders freezing $12.3 billion in PDVSA's assets as part of the legal battle.

Chavez, speaking today from the oil installation that Exxon abandoned last year when the Venezuelan government took control of four joint ventures in the country's Faja del Orinoco region, called the U.S. oil company a ``thief.'' He said the country's petroleum reserves will never be controlled by the U.S. again.

Sure, you guys go right ahead and develop those oil fields yourselves ...

Venezuela sells more than half its oil output to the U.S. It can't quickly shift to new customers because its thick, sulfur- rich oil can only be handled by refineries designed specifically for its characteristics. Most of those are on the U.S. Gulf Coast.

Ramirez said today during the television program that there is a global shortage of oil, and that Venezuela won't have problems finding new buyers. Chavez, who says the Faja has reserves of more than a trillion barrels, said reports that PDVSA is in financial trouble are false. "Supposedly Venezuela is going to go under, PDVSA is going to go under, because only the U.S. has refineries to process our oil,'' Chavez said. "Don't believe these lies.''

Okay. Exactly who else can handle the oil?

The president said he's considering the creation of an ``unexpected gains'' tax on the oil industry. The levy would be charged progressively as oil prices rise above average levels, Chavez said.

Sounds like Hillary's tax plan ...

Posted by Steve White 2008-02-18 00:00|| || Front Page|| [11131 views ] Top

#1 A few more years and it won't matter. US policy is to ramp Canadian tar sands production to completely replace Venezuelan imports.

Posted by ed 2008-02-18 01:27|| 2008-02-18 01:27|| Front Page Top

#2 the way this has panned out over the last few days i don't think that it matters now. Gas didn't go up no one really said anything about it on the news no one really noticed his remarks at all

Posted by sinse 2008-02-18 09:19|| 2008-02-18 09:19|| Front Page Top

#3 Chavez may be doing us a big favor. The science and natural resources are there to substantially reduce the flow of his oil into the market. Tar sands, untapped oil fields, coal, biofuels from agricultural wastes, nuclear, super high capacity lithium/silicon batteries, lower-cost solar cells, fuel cell technology are just a few of the things that can reduce the money flowing from our coffers into our enemy's pockets. Please, mister Chavez, help motivate us to eliminate our dependence on you!

Posted by Tholush Squank4616 2008-02-18 09:23|| 2008-02-18 09:23|| Front Page Top

#4 I think Sinse is on to it. #1 - Hugo's threat was his usual temper tantrum over Exxon's freezing of $12B of "his" money. #2 - Making the threats and causing ripples in the world oil market would show that he is a big man on the world stage (almost as ego-gratifying as another big sprocket on the sash). #3 - the failure of anybody to react or raise oil prices over his threats musta been a big blow to the blowhard's ego, and his advisors, no doubt, reminded him that nobody else's refineries could crack that shitty oil he's selling

all in all, a satisfying week, no?

Posted by Frank G">Frank G 2008-02-18 09:30|| 2008-02-18 09:30|| Front Page Top

#5 What's these things in my hand here?
Why they appear to be Hugo Chavez's balls...

Posted by G. W. Bush 2008-02-18 09:36|| 2008-02-18 09:36|| Front Page Top

#6 Courtesy gift to GWB from Exxon's barristers.

Posted by lotp 2008-02-18 10:39|| 2008-02-18 10:39|| Front Page Top

#7 While expected, Hugo will snap his neck making those whiplash reverses.

Posted by Redneck Jim 2008-02-18 12:07|| 2008-02-18 12:07|| Front Page Top

#8 Fer crissakes, Hugo. ya can't even fool the Washington Post...

Mr. Chavez's Bluff

If Venezuela's strongman cut off oil exports to the United States, the first victim would be his regime.

ONE OF the more regrettable ironies of international relations is that the United States, through its voracious consumption of oil, underwrites President Hugo Chávez's regime in Venezuela. In November alone, the United States bought more than 41 million barrels of Venezuelan crude, roughly 10 percent of all U.S. oil imports that month. If the Bush administration were really as committed to overthrowing Mr. Chávez as Mr. Chávez claims, the administration might be tempted to declare a boycott of Venezuelan oil. That would make a small but easily repaired dent in the U.S. economy, but it would devastate Venezuela, since it produces high-sulfur oil that, for the most part, can be refined only in special U.S.-based refineries.

So imagine our astonishment when Mr. Chávez himself threatened this week to cut off exports of crude oil to America. Perpetually angry at the United States, Mr. Chávez made this particular outburst because of his conflict with Exxon Mobil, the American oil multinational whose operations in Venezuela he nationalized last year. While other oil companies accepted Mr. Chávez's compensation terms and went quietly, Exxon Mobil fought the takeover through international arbitration and courts around the world. Last week, the company successfully moved to freeze $12 billion of Venezuelan assets, pending the outcome of the dispute. Enraged, Mr. Chávez announced: "If you end up freezing [Venezuelan assets] and it harms us, we're going to harm you. Do you know how? We aren't going to send oil to the United States." In an interview published Tuesday in the Venezuelan newspaper Ultimas Noticias, Energy Minister Rafael Ramirez declared the country "ready" to make good on the threat.

But someone apparently explained to Mr. Chávez that Venezuela's oil industry, already in decline because of Mr. Chávez's mismanagement, might collapse if he actually carried out his threat. And without oil money, Mr. Chávez, who lost a referendum on extending his rule two months ago, cannot finance the subsidies and social spending that buy what's left of his popular support in Venezuela. Mr. Chávez has now announced a modified, limited boycott: Henceforth, his state oil company will no longer sell crude directly to Exxon Mobil. This gesture will eventually prove meaningless as third parties come forward to buy the oil and then resell it to Exxon Mobil for refining. Also, Mr. Chávez's government declared that the boycott does not apply to high-sulfur oil from the Cerro Negro field, which can be refined only at a facility that Venezuela and Exxon Mobil jointly operate in Chalmette, La. Two cheers for Exxon Mobil. In standing up to Mr. Chávez through peaceful, legal means, it has once again exposed the hollowness of the anti-imperialism with which he justifies his rule.

I wonder when the last time was that The Washington Post led the cheers for Exxon/Mobil?

Posted by tu3031 2008-02-18 12:35|| 2008-02-18 12:35|| Front Page Top

#9 it is now time for exxon mobil to quit buying. even for a week would send a message to oogo.

Posted by USN,Ret. 2008-02-18 14:02|| 2008-02-18 14:02|| Front Page Top

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