Chavez Killing the Goose That Lays Golden Eggs?
Thieves are never satisfied with how much they steal:
CARACAS, Venezuela - Forcing Big Oil to give up control of Venezuela’s most promising oil fields this week will be relatively easy for President Hugo Chavez, but he will face a more delicate challenge in getting the world’s top oil companies to stay and keep investing.
If Chavez can persuade companies to stick around despite tougher terms, Venezuela will be on track to develop the planet’s largest known oil deposit, possibly to surpass Saudi Arabia as the nation with the most reserves.
If he scares them away, the Orinoco River region could end up starved of the investment and know-how needed to transform its vast tar deposits into marketable crude oil.
Chavez theft of the oil infrastructure that the big oil companies have built happens this week. He may get away with this or he may not.
Oil companies need a certain amount of profit in order to develop a find. If they don’t get that they will simply walk away.
I suppose at that time Chavez will reopen negotiations with the second tier of possible developers. The story says that he may strike a bargain with China. However since the oil in Venezuela is heavy and tar like it’s likely that China may not be able to efficiently develop the oil.
That would mean less profit to China and Venezuela and likely less supplies on the world market. Chavez is a thief and a thug. The way he’s running his country he’s going to need more and more money to keep his head attached to his body. If I were China I wouldn’t trust him either because sooner or later he’s going to turn on his Socialist brethren.
A couple years ago there was a story on the fact that Chavez was going to enter a long term relationship with China to buy his oil. So.
If China is buying their oil from Venezuela they aren’t buying it from somewhere else. We will simply purchase our oil from whomever China would have otherwise purchased from. These long term deals won’t affect the market. The same goes if we were energy independent. If there was a shortage on the world market our price would go up because the oil would flow to where the money is. That doesn’t mean we shouldn’t develop what we can because it’d be great for our economy to keep that money here.
Funny how the left is so worried about the trade deficit until you talk about the billions we ship overseas to purchase our energy. Then that becomes no problem.
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