Gold9472
04-10-2007, 08:44 AM
Chavez, oil companies on collision course
http://www.chron.com/disp/story.mpl/business/4700624.html
By SIMON ROMERO and CLIFFORD KRAUSS
New York Times
4/10/2007
CARACAS, VENEZUELA — With President Hugo Chavez setting a May 1 deadline for an ambitious plan to wrest control of several major oil projects from American and European companies, a showdown is looming here over access to some of the most coveted energy resources outside the Middle East.
Moving beyond empty threats to cut off all oil exports to the U.S., officials have recently stepped up pressure on the oil companies operating here, warning that they might sell American refineries meant to process Venezuelan crude oil.
"Chavez is playing a game of chicken with the largest oil companies in the world," said Pietro Pitts, an oil analyst who publishes LatinPetroleum, an industry magazine based here. "And for the moment he is winning."
But this confrontation could easily end up with everyone losing.
The biggest energy companies could be squeezed out of the most promising oil patch in the Western Hemisphere. But Venezuela risks undermining the engine behind Chavez's socialist-inspired revolution by hampering its ability to transform the nation's newly valuable heavy oil into riches for years to come.
As Chavez asserts much greater control over Venezuela's oil industry, his national oil company, Petroleos de Venezuela, is showing signs of stress. Management has become increasingly politicized, and money for maintenance and development is being diverted to pay for a surge in public spending.
During the last several decades, control of global oil reserves has steadily passed from private companies to national oil companies like Petroleos de Venezuela.
According to a Rice University study, 77 percent of the world's 1.148 trillion barrels of proven reserves is in the hands of national companies; 14 of the top 20 oil-producing companies are state-controlled.
The implications are potentially stark for the U.S., which imports 60 percent of its oil.
"We are on a collision course with Chavez over oil," said Michael Economides, an oil consultant in Houston who wrote an influential essay comparing Chavez's populist appeal in Latin America with the pan-Arabism of Col. Moammar Gadhafi of Libya two decades ago. "Chavez poses a much bigger threat to America's energy security than Saddam Hussein ever did."
http://www.chron.com/disp/story.mpl/business/4700624.html
By SIMON ROMERO and CLIFFORD KRAUSS
New York Times
4/10/2007
CARACAS, VENEZUELA — With President Hugo Chavez setting a May 1 deadline for an ambitious plan to wrest control of several major oil projects from American and European companies, a showdown is looming here over access to some of the most coveted energy resources outside the Middle East.
Moving beyond empty threats to cut off all oil exports to the U.S., officials have recently stepped up pressure on the oil companies operating here, warning that they might sell American refineries meant to process Venezuelan crude oil.
"Chavez is playing a game of chicken with the largest oil companies in the world," said Pietro Pitts, an oil analyst who publishes LatinPetroleum, an industry magazine based here. "And for the moment he is winning."
But this confrontation could easily end up with everyone losing.
The biggest energy companies could be squeezed out of the most promising oil patch in the Western Hemisphere. But Venezuela risks undermining the engine behind Chavez's socialist-inspired revolution by hampering its ability to transform the nation's newly valuable heavy oil into riches for years to come.
As Chavez asserts much greater control over Venezuela's oil industry, his national oil company, Petroleos de Venezuela, is showing signs of stress. Management has become increasingly politicized, and money for maintenance and development is being diverted to pay for a surge in public spending.
During the last several decades, control of global oil reserves has steadily passed from private companies to national oil companies like Petroleos de Venezuela.
According to a Rice University study, 77 percent of the world's 1.148 trillion barrels of proven reserves is in the hands of national companies; 14 of the top 20 oil-producing companies are state-controlled.
The implications are potentially stark for the U.S., which imports 60 percent of its oil.
"We are on a collision course with Chavez over oil," said Michael Economides, an oil consultant in Houston who wrote an influential essay comparing Chavez's populist appeal in Latin America with the pan-Arabism of Col. Moammar Gadhafi of Libya two decades ago. "Chavez poses a much bigger threat to America's energy security than Saddam Hussein ever did."