BTW, for those wanting to see some of what this fight boiled down to you might want to check this out.
http://
www.trabajadorpetrolero.c...ArticleId=43066
It is a bulleting issued by the "Gente de Petroleo" in the Dec 02 / Jan 03 oil strike:
Some of their demands:
The strike will be maintained until -
1) President Chavez resigns
2) New presidential elections are called
3) Ali Rodriquez, Rafael Ramirez and other government officials controlling oil policy are fired
Thats just the first three points of their demands but you get the idea. Thankfully, they lost and no longer are involved in the Venezuelan oil industry.
Tor, updated the oil numbers with new info. You might want to check it out:
http://www.haloscan.com/comments...7345404/
#129355
The Oily People didn't figure on a number of things when they "struck":
a) They're not indispensable;
b) They were in dereliction of duty, even from a strictly legal standpoint,
c) They could be replaced (and were!), and:
d) A lot of them didn't even need replacing, as they were superfluous to start with (and the per-person profit of PDVSA, of all things, tells the tale.)
Must suck to be them...
I wonder if the PDVSA strikers were at all inspired by Ayn Rand's novel "Atlas Shrugged."
In it, the world's top company executives, engineers, doctors, artists, bankers, scientists - all geniuses, all hardworking, all Atlases bearing the weight of the world, all abused, disrespected, unrewarded, go on strike.
But the strike is not obvious initially - they just all quietly disappear and hide in a secret valley.
The world economy crashes, infrastructure collapses, famine is widespread.
The world's "Atlases" plan to come out into a bright new future and resume work, when the population that survives is properly grateful and appreciative, understands that nationalizing companies is evil, socialism doesn't work, welfare is verboten, and only a free market will provide prosperity for everybody.
Owl, I never knew that was what that book was about. If farmers weren't among that group how did they avoid starving to death.
BTW, the contagion is spreading. Bolivia nationalized its natural gas industry today:
http://10.177.187.157/BISDashboa...oard/
Login.aspx
Just read the bulk of this article. I highly recommend it to Tor. Tor, this is what you won't get from The Economist.
Really, the putrid logic of neoliberalism had to be transcended. This was a big task, but thank God these spoiled idiots played their hand and tried to use their power to overthrow the consitutional order. Their stupidity, fanaticism, and dogmatic greed did them in. Good riddence. Never, ever, should they be allowed back into PDVSA.
Send them to Alberta, Canada where they can kiss the asses of the elites there. I am sure these 'professionals' will play the same kind of games with the Canadian state oil company that they did for Venezuela.
For those doubting that the old management wanted to take Venezuela out of OPEC read this:
http://politica.eluniversal.com/
...t_22210AA.shtml
Caracas.- Andrés Sosa Pietri, ex presidente de Petróleos de Venezuela (Pdvsa), no comprende como el presidente Hugo Chávez está retomando la política petrolera desempeñada por Acción Democrática y Copei.
'El presidente Chávez está repitiendo las políticas adecas y copeyanas. Estos partidos se han dedicado a trabajar en la variable precios en la materia petrolera, que es la más esquiva'.
La continuidad de la defensa de esta variable se refleja, al parecer de Sosa Pietri, en la decisión de cumplir con el tramo restante de los recortes de producción acordados el año pasado y la defensa del rol de la Organización de Países Exportadores de Petróleo (OPEP) en el comportamiento del mercado.
'Los precios de la OPEP no subieron en 1973 gracias a la OPEP. Pero, los adecos fortalecieron esta idea porque les beneficiaba, era su gran bandera política. Si las políticas de reforzamiento de la OPEP fracasaron año tras año, no fue porque no se intentó, sino porque la OPEP no pudo funcionar, la OPEP es un fracaso, como todos los carteles'.
Para Sosa Pietri las diferencias culturales y políticas entre el mundo árabe y el occidental, sumado a la carencia absoluta de confianza entre los miembros a la hora de tomar decisiones sobre recortes y control de precios, culminó en el 'fracaso de la OPEP'.
Salida discreta
Sin anuncios protocolares, pues generarían diferentes tipos de expectativas, Venezuela debe iniciar un proceso de retirada de la OPEP, donde el primer paso sea la no ratificación de los recortes de producción.
'En junio finalizan los acuerdos de Riad y Amsterdam, pues hay que dejarlos morir y sin rasgarse las vestiduras, hay que retomar la política de incremento de la producción. A pesar del rror se puede aumentar en un milllón de barriles diarios'.
Propone dividir el incremento en dos fases: recuperación de los 525 mil barriles acordados en los recortes y aumento gradual con colocación de crudos previamente asegurados en los mercados internacionales.
'Venezuela no debe ir a las reuniones ordinarias o extraordinarias de la OPEP. Sólo asistir a los comités de monitoreo del mercado, más nada. No entienden que de esas reuniones viven los especuladores, quienes terminan haciendo grandes fortunas y perturbando el mercado'.
Retomar la política de incremento de la producción, esencia principal del plan de expansión propuesto por Sosa Pietri durante su presidencia en Pdvsa, generaría efectos positivos inmediatos en las dos áreas más erráticas de la economía nacional: el déficit fiscal (se reactivaría el sector petrolero, el cual aumentaría la tributación) y el desempleo.
'Si ese plan se hubiera realizado, hoy el país estaría recibiendo a un precio de 7,50 dólares el barril, aportes por 16 mil 500 millones de dólares. Además que al incorporar al sector de bienes y
continued...
'Si ese plan se hubiera realizado, hoy el país estaría recibiendo a un precio de 7,50 dólares el barril, aportes por 16 mil 500 millones de dólares. Además que al incorporar al sector de bienes y servicios venezolano se tendrían alrededor de 163 mil empleos, hoy promedian 70 mil'.
Este repaso de las cifras que pudieron ser, son plantedas por Sosa Pietri como vía posible en la actualidad. 'Hay que aumentar el ingreso a través de la actividad petrolera. Hay que quitarse las gríngolas y aprovechar el potencial que se tiene. Nunca, y subrayo esto, nunca se ha utilizado el petróleo como una fuente de apoyo real a la manufactura y agricultura'.
Acciones petroleras
La segunda fase de la propuesta económica y petrolera de Sosa Pietri implica la venta de acciones de Pdvsa en la bolsa. 'Aunque se venda hasta 99% de las acciones de Pdvsa, se puede mantener el control de la empresa. Yo tampoco soportaría que Shell o cualquier trasnacional decidiera la política petrolera de Venezuela'.
Pdvsa está valorada en 150 millardos de dólares. De allí que Sosa Pietri propone que se realicen emisiones por fases, distribuidas con fines distintos.
'Con la primera colocación se paga la deuda pública interna. De esta forma se libera 15% del presupuesto. Luego, la deuda pública no refinanciada, que nos libera de los altos compromisos de pago'.
Solucionado ambos aspectos, el resto de los recursos que se obtengan por esta vía y los resultantes de la liberación del presupuesto deberán dirigirse a educación, salud e infraestructura.
'De no hacerse esto, nos estamos condenando a mayor pobreza', afirma el experto.
Here is Sosa Pietris vision for Venezuelan oil policy:
http://www.analitica.com/va/econ...ion/
8497312.asp
VIII. RECOMENDACIONES.-
1. El Estado debe apartarse de la gerencia del negocio petrolero. Ha de limitarse a establecer las normas bajo las cuales deben desempeñarse las empresas interesadas, normas éstas que están suficientemente definidas en la Ley de Hidrocarburos de 1943.
2. Como consecuencia de lo anterior, PDVSA ha de ser transformada en una empresa pública por acciones de derecho privado. La dirección de la empresa, en manos de profesionales y técnicos venezolanos de carrera, se orientaría a la búsqueda del negocio, de la oportunidad, contribuyendo de este modo -con visión de negocio- al crecimiento del resto de la economía nacional. Estas acciones, naturalmente, tendrían que venir acompañadas de políticas -fiscal, monetaria y cambiaria- coherentes.
3. Venezuela debe asignar a empresas privadas, capacitadas, áreas que no está explotando PDVSA o que no se encuentran dentro de los planes de inversión de PDVSA en los próximos 10 años.
4. Venezuela debe retirarse de la OPEP. Esta organización, ni ha satisfecho, ni está en condiciones de satisfacer, por su naturaleza, los mejores intereses nacionales.
5. Venezuela debe desplegar una diplomacia que la conduzca hacia sus principales socios comerciales y, desde luego, hacia sus clientes petroleros. Debe aprovechar de entrar por la puerta que abre Estados Unidos y sellar con esta nación una alianza comercial en general y petrolera en particular.
About as succinct as you can get. Privatize the oil industry and pull out of OPEC.
Yet more Vendipatria thinking:
Retrospective: PDVSA ex-president Luis Giusti
Latin America’s New Business Elite
Business Week International Latin American edition
October 26, 1998
If you want a good reason or two why OPEC is on its last legs, talk to Luis E. Giusti. Few executives have done more to change the global oil industry outlook than the 54-year-old president of Petroleos de Venezuela (PDVSA), the second-largest oil company in the world.
Since 1990, Giusti has spearheaded an ambitious policy to open the state-owned monopoly to private companies and to ramp up oil production.
Giusti sold the opening-up despite deep-rooted nationalistic opposition to such a move. He accomplished this by making it a significant part of a broader vision for assuring Venezuela's future as a strategic global oil supplier. His aim: to double production over the next 10 years, to around 6 million barrels daily. Garrulous and candid, Giusti mobilized support with a campaign of talking to ministers and politicians, lobbying congressional committees, making speeches, and writing articles. Today, dozens of foreign companies are drilling in Venezuela's prolific oilfields.
While fears are increasing that economic distress will lead to backsliding from free-market policies, Giusti's reforms in the oil industry are likely to survive any backlash--and to serve as a successful benchmark for oil openings that are under way in other countries such as Brazil.
Populist former coup leader Hugo Chavez, the front-runner in Venezuela's Presidential election campaign, promises to fire Giusti and to ''review'' the deals with foreign companies.
But with or without Giusti, it's unlikely that Chavez or any President could roll back Giusti's oil policy.
That's partly because PDVSA under Giusti and predecessors has earned Venezuelans' confidence as a well-managed company. That is in stark contrast with most state-run operations. What's more important, Giusti fundamentally changed the way Venezuelans think about how their society can benefit from their rich natural endowment. This is a crucial example for other Latin reformers.
Born in an oil field camp, Giusti earned a master's degree in engineering from the University of Tulsa. He worked for Royal Dutch/Shell Group in Venezuela until the 1975 industry nationalization. After 32 years in torrid oil fields and refineries, he is still familiarly known to workers as el catire, for his fair hair and light complexion.
He denies any national political ambitions, although his name has been mentioned as a future presidential candidate.
But inside or outside public life, Giusti seems likely to continue to influence Venezuelan energy and industrial policy.
And his basic reforms seem certain to endure.
This shows how Giusti was using the privatization in Venezuela to break OPEC:
http://www.gasandoil.com/goc/new...ws/
ntl81462.htm
PDVSA chiefs speak out
Feb. 18, 1998 During a recent conference, PDVSA Chief Luis E. Giusti called OPEC's quota system "an obsolete subject " that is "no longer relevant in today's market."
Venezuela currently is producing 3.3 million bpd, about 700,000 bpd above its OPEC quota. That volume is equal to the country's operational capacity, Giusti said.
Giusti explained that PDVSA's operational capacity will always be less than its maximum design capacity. Historically, up to 8 % of production capacity is unavailable at any given time because of operational problems such as broken pumps, and another 5-6 % will be out of service for regular maintenance.
The PDVSA chief also shrugged off any suggestion that Venezuela might be responsible for a surplus in global oil supplies, citing the Asian economic crisis and the mild northern winter as the main causes of the excess.
Giusti also pointed out that Venezuela no longer has the option of " closing and opening" production since it has allowed private investment in its upstream sector.
Furthermore, since much of Venezuela's production is heavy and extra- heavy crudes, PDVSA has to produce enough to supply those customers whose refineries can handle the non-fungible oils, he said.
PDVSA is still on track to increase maximum production capacity by at least 5 % in 1998, Giusti said. That would bring the figure up to about 4 mm bpd. He acknowledged that some projects with longer lead times might be deferred because of cash flow considerations related to low oil prices. But any deferrals won't include the four existing extra-heavy oil extraction and upgrade projects, he stressed. Proposals covering two additional deals, with Exxon Corp. and Coastal Corp., will be submitted to the Venezuelan Congress for approval later this year.
Juan Szabo, vice president of PDVSA's exploration and production division, blasted drilling contractors for demanding outrageous rates in contracts coming up for renewal.
He defined "outrageous" as "doubling in one year." Szabo said. He didn't specify a fair rate, but said it would be a figure that reflected the risk-reward factors of operating in Venezuela.
Drilling contractors operating in Venezuela can expect consistent utilisation and face little commercial risk, and the companies' rates ought to reflect those factors, he said.
PDVSA already has released one jackup rig because its owners demanded an increase to around $ 65,000 a day from $ 32,000 a day. Szabo did not identify the company involved, but Cliffs Drilling Co. Recently said that it would be moving a jackup from Venezuela to "a more lucrative market" due to PDVSA's reluctance to pay $ 45,000 a day.
OW, what are the possibilities that Venezuela might get rid of all of these foriegn oil corporations?
Can it be done in, say, twenty years time?
Maybe in twenty years time. But not right now. They did make big investments relatively recently so for Venezuela to just shut them down would infuriate not only those companies but also their governments too - ie, the U.S., France, etc. And that really might just provoke pretty serious action. For example, action might be taken against Cito in the US.
So Venezuela will let them operate. They will just squeeze them for every cent that they can. Which is exactly what they have been doing.
Small correction, Slave Revolt.
There is no more state oil company in Canada. Also no state gas company or mine or airline or telephone company. The only thing I can think of right now that makes money is the liquor stores monopolies, which are operated as "Crown corporations" by some provinces - helps with revenue.
"Bolivia has South America's second largest natural gas reserves after Venezuela, and all foreign companies must turn over most production control to Bolivia's cash-strapped state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, Morales said"
I'd call Chavez's move against oil companies a gamble. Maybe it will payoff in the long term. Regardless of what happens at least Venezuela has lots of cash for investment and keeps the multinational oil companies in the country for their technological expertise.
Compared to what it seems like Morales is doing Chavez seems prudent.
Nationalization is typically done to help the people. But it is important to remember that nationalization does not necessarily end up helping the people in general. The goal should be to maximize current and future tax revenues (this Chavez seems to appreciate to some extent).
If the industry is run less efficiently for example, less tax revenue will accure to the people. There is lots of evidence that national oil companies are less efficient. You can seek to harness the efficency and technological expertise of multinationals (or local firms) through smart contracting (elevator clauses etc.) and supervison.
Also national oil companies can extract rents themselves since competition is minimized. The prime example of course is PDVSA. Concerned about multinationals lobbying....what about old PDVSA.
As long as tax revenues are maximized who cares about who operates the fields? The decision should be based on what works not nationalism and short-termism.
In fact, I very much doubt that CAP's decision in 1976 maximized current and future tax revenues for Venezuela......just as I doubt that Morales is being smart here (in the long term). There are paths between the two extremes.
Owl spake:
"The world's 'Atlases' plan to come out into a bright new future and resume work, when the population that survives is properly grateful and appreciative, understands that nationalizing companies is evil, socialism doesn't work, welfare is verboten, and only a free market will provide prosperity for everybody."
And of course, the irony of all this is lost on the author of that nauseous tome, not to mention all her brain-dead neo-con followers. Socialism doesn't work (because Big Bidness lobbied so hard to get various governments to gut it and wreck it)--the corporations will provide! For a price, of course. And the competition won't be to see who can do it the best or for the least, but the worst and for the most. Profit, profit uber alles. Yes, let's all swap evil, faceless Big Government for just-as-evil (if not more so), equally faceless Big Corporations. With zero laws and zero public accountability, naturally, since there's no government to trammel these noble saviors any longer. Who better to be at the mercy of?
Actually, this would be a good time for the people to do as they did during the Caracazo, and to shrug off "Atlas". Isn't he just a mythical being anyway?
I'd say we go into the valley, capture these stuck-up elites, and put them to work on an organic farm. There they can hone their aristocratic skills toward more humble, and nobel ends: growing the best squash, pulling weeds, spreading manure, washing the horses and cows, etc.
As I have said many times: good thing that Chavez is in control and not Slave R.--I would have raided East Caracas and the shiney malls for organic farm labor years ago.
(Just kidding, oligarchs....ok, half-kidding.)
I like the way you think, SR.
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