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| Caribbean-Latin America |
| ft: Venezuela buys Russian oil to avoid defaulting on deals |
| 2006-04-28 |
| "What goes around comes around" from same oil trader as before this analysis... Well Chavez is now buying Russian oil to avoid defaulting on its sales deals. How come? Venezuela, the world's fifth-largest oil exporter, has struck a $2bn deal to buy about 100,000 barrels a day of crude oil from Russia until the end of the year. Venezuela has been forced to turn to an outside source to avoid defaulting on contracts with "clients" and "third parties" as it faces a shortfall in production, according to a person familiar with the deal. Venezuela could incur penalties if it fails to meet its supply contracts. But why the shortfall? Under President Hugo Chávez, PDVSA's oil output has declined by about 60 per cent, a trend analysts say has accelerated in the past year because of poor technical management. Mr Chávez's push to extend his influence throughout Latin America and the Caribbean with promises of cheap oil for friends and allies may be overstretching PDVSA's finances, however. Venezuela currently supplies about 300,000 barrels per day of oil and products to Cuba, Nicaragua and others under favourable long-term financing arrangements. This week, Venezuela signed a deal to send oil to town mayors in Nicaragua aligned with the leftwing Sandinista party. So, Venezualans are billions worse off as Chavez plays his childish games to "battle" against the imagined enemy we see in these forums from time to time, a global capitalist conspiracy. The truth however is simply that Chavez has given away the nations wealth on a massive scale. The global fungible oil market, along with OPEC, the most successful producer cartel in the world, serves the interests of the citizens of producers best. Unlike super-Chav it maximises the value of oil reserves for their owners. The great game is over. The new game is globalisation of all the other areas of economic activity. The oil market globalised in 1972. |
| Posted by:3dc |
| #8 I agree, they are that stupid! |
| Posted by: TMH 2006-04-28 16:35 |
| #7 If communists governedd Sahara this would have to import sand. IF they governed Saudi Arabia this would have to import oil. |
| Posted by: JFM 2006-04-28 16:12 |
| #6 HA! HA! HA! HA! HA! HA! HA! HA! HA! |
| Posted by: newc 2006-04-28 16:05 |
| #5 He has been lying about how much PDVSA has been producing and now it has caught up with him. |
| Posted by: TMH 2006-04-28 16:00 |
| #4 Hugo Chavez is the Robert Mugabe of oil. |
| Posted by: RWV 2006-04-28 10:42 |
| #3 Add to this the "smash and grab" he has done with the big oil companies, and I think he is going to find it hard to attract foriegn investment in the future. |
| Posted by: bigjim-ky 2006-04-28 10:08 |
| #2 Can we start a "Moonbat Petroleum Services" as an IBC and buy his oil at below market to resell elsewhere as a covert economic warfare op? Think about it...we could bankrupt Hugo and his Bolivarian Revolution and make a killing doing it... |
| Posted by: mjh 2006-04-28 09:52 |
| #1 His follow-up to another is just as good: Question: Are you saying that you approve of the cartelised oligopoly that masquerades as the world oil market? That goes against pretty much every globalisation and market liberalisation text ever written. Answer: no, I think the cartel is wrong. I was just pointing out, mainly for some people, that far from the owners of oil reserves getting a poor deal in the alleged global capitalist conspiracy the opposite is in fact true. Furthermore the great irony is that those who maintain I am wrong, like ..., and that the global oil market is rigged against producers and in favor of the US (I mean consumers LOL) are actually not serving their electorates well at all. Perhaps this isnt really surprising? And my denoument that the "Great Game" is over is I think something that few outside of the oil industry have realised. The end of the hydrocarbon age is beckoning if not already upon us, thats why big oil is rapidly transforming itself into a manufacturing industry that will produce unconventioanl hydrocarbons and then the successors to hydrocarbons. OPEC, by their greed, have in fact blown it. What value oil reserves if the world in 20-40 years no longer runs on oil? Most of OPEC have decades more oil to produce than that. Still, its been a lucrative 30 years and its a fine party today. Generational solidarity? WS |
| Posted by: 3dc 2006-04-28 09:14 |