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As if the price of gas wasn't high enough...

Discussion in 'General Discussion' started by Gallowglass, May 1, 2007.

  1. Gallowglass

    Gallowglass Winter is coming

    I thought history had already shown that this sort of thing never works...


    By Brian Ellsworth
    PUERTO PIRITU, Venezuela (Reuters) - Venezuela stripped the world's biggest oil companies of operational control over massive Orinoco Belt crude projects on Tuesday, a vital move in President Hugo Chavez's nationalization drive.
    The May Day takeover came exactly a year after Bolivian President Evo Morales, a leftist ally of Chavez, startled investors by ordering troops to seize his country's gas fields, accelerating Latin America's struggle to reclaim resources. "The importance of this is that we are taking back control of the Orinoco Belt which the president rightly calls the world's biggest crude reserve," said Marco Ojeda, an oil union leader before a planned rally to mark the transfer.

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    The four projects are valued at more than $30 billion and can convert about 600,000 barrels per day (bpd) of heavy, tarry crude into valuable synthetic oil.
    U.S. companies ConocoPhillips, Chevron, Exxon Mobil, Britain's BP, Norway's Statoil and France's Total agreed to obey a decree to transfer operational control on Tuesday, although the OPEC nation complained ConocoPhillips was somewhat resistant.
    In Puerto Piritu, near the facilities that refine Orinoco crude, workers prepared early on Tuesday to celebrate the takeovers, displaying Venezuelan red, blue and yellow flags and daubing a wall with Chavez's slogan: "Homeland, Socialism or Death." The anti-American leader was also in a festive mood before a rally marking what he called the end of an era of U.S.-prescribed policies that opened up the largest oil reserves in the hemisphere to foreign investment.

    "Open investment will never return," he said on Monday to thousands of cheering workers dressed in the signature red of his self-styled leftist revolution at a rally for workers rights.
    "We are sealing up that open investment era and burying it deep down in the Orinoco oil reserve," he added.
    Buoyed by an oil price bonanza in the No. 5 crude exporter to the United States, Chavez is popular among the majority poor for spending freely on schools, clinics and food handouts. The man who calls Cuban leader Fidel Castro his mentor has vowed to take at least 60 percent of the projects, radicalizing his policies as he rules by decree and politicizes the army, state oil company and judiciary.

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    He is also quickly nationalizing power utilities and the country's biggest telephone company.
    In the oil projects, the companies have agreed to hand over operations but are still discussing continued shareholding and compensation in sometimes contentious negotiations before a deadline next month. Oil Minister Rafael Ramirez has said there may not be compensation in some cases and that Venezuela will only consider agreements on the booked value of the projects rather than their much larger current net worth.

    Although Venezuela claims output of more than 3 million bpd, analysts reckon it strains to pump 2.6 million bpd. U.S. data peg it as the world's No. 8 exporter.
    Industry analysts fear Venezuela's state oil company PDVSA could ultimately run into production and safety problems when it loses the management and technology of the experienced majors.
    As he shrinks the private companies' role, Chavez has formed joint ventures with allies such as China, Belarus and Iran involving many state entities that are unfamiliar with developing such crude. Still, Chavez hailed Tuesday's takeovers as the South American nation reclaiming its sovereignty.

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    "The wheel has turned full circle," he said. "Long live PDVSA, long live the workers of PDVSA."
  2. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    I like high gas prices -- especially the state & federal tax portion. Let there be $20/gallon gas and my XOM stock will quadruple.
  3. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    Hugo is a pie (eyed) piper leading his nation into the ground. Watch how quickly we will help that nation out after the citizens realize what he has done. The US company stocks are bound to sink, right along with Venuzuelan production figures, and the stockholders will suffer a bit. YOu can pretty near bet that any debt that Venuzuela owes to the companies will be repudiated, too. Some agreement --
  4. Minuteman

    Minuteman Chaplain Moderator Founding Member

    Let me do a little reading between the lines here. Here are the things that stood out to me.

  5. Minuteman

    Minuteman Chaplain Moderator Founding Member


    I posted this in the " Peak Oil" thread but I wanted to post it here too. If you have direcTV then check it out. If not there is a web site

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    I have been watching something interesting this morning. I have DirecTV satellite and they have been running a promo for a short 9-minute film produced by Shell Oil Company. It is showing continuously on channel 115.

    The story is supposedly based on true events. It has a reporter in Brunei interviewing a Shell petroleum engineer. When he asks what the story is about she responds “Dwindling oil reserves and what you are doing about it.”
    He takes her out to an offshore field and on the trip he says, “We all know that easily accessible oil is a thing of the past.”
    Flying over the offshore rigs he tells her that there are hundreds of small pockets of oil left in the field but it is not environmentally or economically feasible to build a platform on each one of them to produce what little oil is there.

    While visiting his son he watches him suck the last bit of a shake from the sides of the glass by bending the straw to get to it.
    And Eureka! He has solved the problem of tapping these widespread pockets of oil.
    The wrap up states that his idea of a “Snake” well to reach multiple pockets is in use in Brunei and being implemented around the world.

    I find several things very telling about this film. First of all modern directional drilling technology has been around for over 20 years so, the only thing that is really “new” about this engineers “Eureka” inspiration was to snake around from one pocket to another with the same well bore. Which I admit is a good idea. But the telling thing is that it has only been utilized in the last few years. I talked to a directional driller this morning and he told me that they have been doing that for some time now in parts of the Gulf of Mexico.

    I think the scene in which the son is sucking up the last of his shake is an attempt to plant the idea in people’s minds that we are down to the last drops. And the passing comments about the dwindling reserves and end of the easily accessible reserves.

    I think what we are seeing with this and with BP’s advertising campaign and others, is a concerted effort to start waking people up to the realities of peak oil.
    The oil companies know that in the very near future oil is going to climb to astronomical new prices. And the outrage of the public will be swift and harsh. I think these films and ads are attempts to try and minimize that. A pre-emptive strike at public opinion.

    The scary part is this, only two or three years ago the big oil companies were denying and ridiculing peak oil and trying to stifle anyone who broached the subject.
    But now I think they see that the cat is out of the bag and there is no more denying it.
    So they are trying to gradually introduce it and assure people that they are working on it.
    There is a Company info page that you can access that tells about how Shell is rising to the challenge and is working on alternatives, better production methods, etc. But one telling statement says this “ Renewables may be the fastest growing sector of the energy industry, but they are unlikely to produce more than 10% of the worlds supply by 2025.

    This is a problem that will have dire effects on all of us long before 2025. We have just a very few years before this hits us full force.

    A postscript.
    I have to admit that it gives me some satisfaction to see the things that I have been warning about for over 5 years now finally starting to become mainstream and accepted. Newscasters, oil companies, and even the president now discuss the things that others and I were ridiculed for just a few years ago.
    But it is bittersweet. While I am glad to see people starting to wake up, it is one thing in my life that I would have been all to glad to be wrong about. It is only going to get worse, much worse. And that is not a pleasant thought to face.

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