Is Chavez becoming a liability?

The Corinthian

FYI wrote:

Well we really all should be bowing down to the all knowing Corinthian in this instance, I'm truly sorry. However the extent of your extensive knowledge ranges from: Oil - risky business (also a film staring Tom Cruise if I'm not mistaken) to emmmm, well that's it, but nevertheless it's pretty intriguing stuff.

Rather than bowing down anywhere, you might read something other than political radical Web sites. You came out with a glib comment regarding risk in the oil industry which betrayed the fact that you don’t know even the most basic thing about how commerce works.

Given your disdain for others lack of knowledge I can only assume that you understand the basic principles of risk as they exist within the capitalist system. Royal Dutch Shell make £1.5m an hour, so I'm assuming they understand the concept.

http://business.guardian.co.uk/story/0,,2134967,00.html

You talk about the basic principles of risk and then link to an article about the profitability of one company? Are you even familiar with the basic economic term?

As for the oil business being as risk free as you say:

“Oil exploration is an expensive, high-risk operation. Offshore and remote area exploration is generally only undertaken by very large corporations or national governments. Typical Shallow shelf oil wells (e.g. North sea) cost $10 - 30 Million, while deep water wells can cost up to $100 Million plus. Hundreds of smaller companies search for onshore hydrocarbon deposits worldwide, with some wells costing as little as $500,000 USD.”
http://en.wikipedia.org/wiki/Oil_exploration

The reality is, as you'll no doubt also know there are some ventures that are more risky than others, yet we have off the West of Ireland an oil company 'risking' everything to find a bit of gas.

Is this another party political broadcast to distract attention from the fact you don’t understand what commercial risk is?

Oh and then there's Tony O'Reilly and his 'find', bloody hell he paid what? a couple of hundred grand for what might be worth billions!!!

Because you’re guaranteed to find oil wherever you look... Oh, wait, you’re not:

“Although modern oil-exploration methods are better than previous ones, they still may have only a 10-percent success rate for finding new oil fields.”
http://www.howstuffworks.com/oil-drilling1.htm

The situation in Venezuela is both more clear cut and more complex. The potential much greater, but the risk also much greater.

http://www.venezuelanalysis.com/articles.php?artno=1000

Why? you ask. Well in order to rape a country of it's natural resources you must have a contract in place that is binding (or some military junta willing to impose the 'contract'), now if you make deals with corrupt regimes there is a likelihood someone might want to overthrow them someday and renege on your deal. Yadda yadda yadda, you obviously know all this...

Nice theory. How about some credible facts to back it all up now?

And directly after that I pointed out the flaw in your figure manipulation.

Where? In your head? Feel free to point out your debunk.

Do you ever write anything remotely interesting?

Not for you. Not radical enough.

FYI

Thank god for Wikipedia, makes everyone a genius.

Cost (your exposure) must be balanced against predicted profit - and thus the risk is assessed.

What is the potential of Venezuela's +known+ reserves?

Does that RTE documentary answer some of your questions? yes.

The Corinthian

FYI wrote:

Thank god for Wikipedia, makes everyone a genius.

I wouldn't place too much hope in that...

If you prefer you can Google any of a myriad of other sources that will point out (although figures will vary) that oil exploration is not the 'sure thing' you think it is. And as has been shown in Venezuela, political instability is another risk to be factored in.

Not that whether Venezuela was being exploited by nasty, evil Capitalism or not makes any difference to the topic of this thread. Chavez can be a dictator, or be in the process of becoming one or not be one at all and still renege on agreements. After all, Zapatero reneged on a military alliance with the US and he's certainly not a dictator and Castro reneged on on numerous commercial treaties when he took power and he certainly is (or possibly was at this stage).

Cost (your exposure) must be balanced against predicted profit - and thus the risk is assessed.

What is the potential of Venezuela's +known+ reserves?

Your point being?

Does that RTE documentary answer some of your questions? yes.

No, it was irrelevant to what we're discussing.

Still waiting on you showing me where you debunked my 'figure manipulation', btw.

FYI

The Corinthian wrote:

And as has been shown in Venezuela, political instability is another risk to be factored in.

I addressed this.

The Corinthian wrote:

Your point being?

No, it was irrelevant to what we're discussing.

It contains some interesting tit bits from the oil industry on commercial risk as it relates to oil exploration. So yes it is relevant.

The Corinthian wrote:

Still waiting on you showing me where you debunked my 'figure manipulation', btw.

It can be found below your post.

The Corinthian

FYI wrote:

I addressed this.

Nope, you didn't.

It contains some interesting tit bits from the oil industry on commercial risk as it relates to oil exploration. So yes it is relevant.

Not that I could see. Care to expand?

It can be found below your post.

No it can't. Feel free to point to where if you think I'm wrong.

TBH, you're just evading at this stage. The tripe you dish out might work well with the converted, but it doesn't stand up well to scrutiny.

bobbyjoe

The Corinthian wrote:

I see you don’t understand what a fact is. Firstly, you need to point out how the previous percentages were unfair. Looking at it 16.7% seems more than fair considering that it’s the petroleum company that is taking the risk, putting in the infrastructure and paying the salaries. Of course 1% could also be quite low. Realistically you would need to compare such percentages against other oil producing countries, in particular those in the developed World and the revenues generated by each type of oil.

Valid sources for your figures would also help your case if you’re trying to discuss facts, BTW.

Secondly, you may an unsubstantiated allegation with regard to the increase in oil prices and the attempted coup. That he was also threatening land ownership at the time might indicate that it was land owners rather than oil producers that were behind it. Or maybe both were in it together. Of course, we don’t know which because all you’ve given us is a claim with no facts behind it.

Firstly no need to be a smartarse ok? below is a summary of the changes in the oil industry under Chavez. Looks like he is transferring the revenue away from the foreign owned companies to the Venezuelan people. What an evil dictator using his countries resources for his country!!!
Also I never alleged the 2002 coup was due to his changes in oil tax just said he was kidnapped soon after the changes were announced. Why should I compare the revenue gained to that in other countries its their oil he's the president he can decide. If he fecks up the economy thats his problem but he's well within his rights to do it.

http://www.venezuelanalysis.com/news.php?newsno=2367

The first “revolutionary measure” was adopted on October 11, 2004, to increase the amount of royalties in the Orinoco Belt, from 1% (since 1943) to 16.6%, which generated an additional $1.9 billion annually, he said.

The second measure, taken on June 24, 2005, fixed the values of royalties for excess production at 30%. Royalties on excess production had been set at 16.6% in the 1990s. The increase to 30% allowed the recuperation of $1.6 billion a year.

The third act of “oil liberation” began in May 2006, when extraction taxes were equalized and set at 33% for all the oil projects in the country, which represented an additional $400 million

The fourth act, Chavez elucidated, occurred in October 2006 when income tax for companies operating in the Orinoco Belt was increased from 34% to 50%. “This sovereign measure permitted the recuperation of $1.1 billion of extra income annually.”

The fifth measure was Decree 5200, adopted on February 26th, and implemented on May 1st of this year, which established the nationalization of the transnational oil companies operating in the Orinoco oil belt.

The Corinthian wrote:

Eroding democracy is when you erode the institutions that diffuse, and thus maintain accountability, within democracy. Destroying the division between the political and legal branches of government is eroding democracy (every government puts their supporters in the Supreme Court, but they don’t create new seats so that they can pack it). Bypassing debate so you can rule be decree is eroding democracy. Effectively silencing media outlets that criticize you is eroding democracy (and reducing it’s effective viewership by taking it out of the reach of your average citizen from 33% to around 6% is exactly that).

He is allowed rule by decree after been given permission by the parliament and it is limited to 18 months. If he wanted to be a dictator surely he's want longer or permanent. His already ruled by degree in 2000 for a similar time period and didn't take over the country either.
Thought the tv station thing was taken care of pages ago. There isn't a country in the world that would have allowed it to stay on air after it took part in a coup. There is plenty of "free" media in Venezuela most of it anti-Chavez.

Basically the bile aimed at Chavez is due to someone trying a different route. He's not bowing down to international financial pressure and allowing other countries to use his as their personal ATM.

The Corinthian

bobbyjoe wrote:

Firstly no need to be a smartarse ok? below is a summary of the changes in the oil industry under Chavez. Looks like he is transferring the revenue away from the foreign owned companies to the Venezuelan people. What an evil dictator using his countries resources for his country!!!

I never asked what he spent the money on, I queried your claim that the oil companies were exploiting the country.

Also I never alleged the 2002 coup was due to his changes in oil tax just said he was kidnapped soon after the changes were announced.

No, you just mentioned the two in the same breath and left the rest of us to join the dots – that’s an allegation even if all you did is imply it in a backhanded manner.

Why should I compare the revenue gained to that in other countries its their oil he's the president he can decide. If he fecks up the economy thats his problem but he's well within his rights to do it.

Because to be exploited you need to be at the rough end of a deal. So if you compare what Venezuela was getting to what another oil producing country, say the US, and find the US is getting way bigger royalties for it’s natural resources, then you have a case. Otherwise your case is actually weakened because Venezuela would be getting a better deal than even evil Amerika.

Thought the tv station thing was taken care of pages ago. There isn't a country in the world that would have allowed it to stay on air after it took part in a coup. There is plenty of "free" media in Venezuela most of it anti-Chavez.

It wasn’t taken care of at all. Again, for the nth time, if the same thing happened with, say, ITV in the UK, the individuals involved would be prosecuted (if they had broken the law), not the station. Chavez instead effectively silenced the station without need to take a legal route.

Basically the bile aimed at Chavez is due to someone trying a different route. He's not bowing down to international financial pressure and allowing other countries to use his as their personal ATM.

LOL. I don’t really mind Chavez myself. For me he’s just another South American demagogue. If they’re not Socialist like him or Castro, they’re Fascist like Pinochet or Peron. Of course, that does not mean he’ll become a dictator, but neither should one ignore what he is increasingly doing.

RedPlanet

The Corinthian wrote:

Because to be exploited you need to be at the rough end of a deal. So if you compare what Venezuela was getting to what another oil producing country, say the US, and find the US is getting way bigger royalties for it’s natural resources, then you have a case. Otherwise your case is actually weakened because Venezuela would be getting a better deal than even evil Amerika.

That's not true at all.
Nobody's talking about some international court of arbitration to determine if Venezuelans have a right to feel "exploited", or to make a case that their oil was being "exploited". In fact, it's being exploited right now, only now the end is for the betterment of the people rather than the betterment of a mulitnational private corporation.

What other countries do with their own natural resources is entirely a matter for them. If the people in those countries feel one way about it or another, is again, a matter for them.
Venezuelan's felt their natural resources were being exploited by private companies and they've rallied around a strongman leader to set it right.
Deal with it.

The Corinthian

RedPlanet wrote:

That's not true at all.
Nobody's talking about some international court of arbitration to determine if Venezuelans have a right to feel "exploited", or to make a case that their oil was being "exploited". In fact, it's being exploited right now, only now the end is for the betterment of the people rather than the betterment of a mulitnational private corporation.

However countries like the US, Saudi Arabia or UK are unlikely to allow themselves to be exploited and more likely to seek a fair price for their resources (unless you want to go down the conspiracy road and suggest everyone is exploited). So you certainly can make objective comparisons.

On the other hand, your argument seems to boil down to "they're exploited because they feel exploited", which is a pretty juvenile bit of logic when you come down to it.

What other countries do with their own natural resources is entirely a matter for them. If the people in those countries feel one way about it or another, is again, a matter for them.

True, but if you are looking for a far greater royalty for the same resource as anyone else you can't whinge about being exploited, because you're not and, ironically, it would become more likely that you'd actually be the one doing the exploitation.

My objection to some of the oil related arguments being made here is that they seem to have no knowledge of even the most basic macroeconomics. Essentially they appear to amount to the sort of soapbox rhetoric that you'd expect of a SWP meeting and that rarely stands up to any serious examination.

Venezuelan's felt their natural resources were being exploited by private companies and they've rallied around a strongman leader to set it right.
Deal with it.

Is he making the trains run on time too?

RedPlanet

Bottom line is: Venezuelan's do not need to meet your arbitary litmus test in order to feel their natural resources were being exploited in a manner that was not beneficial to them.

RedPlanet

Hollywood star Sean Penn applauded President Hugo Chavez as the Venezuelan leader lambasted the U.S. administration and demanded an end to war in Iraq.
Chavez met privately with Penn for two hours Thursday and later praised him as brave for standing up to the White House and calling for President George W. Bush to be impeached.
Chavez said he had lunch with Penn and discussed the question of "why the (U.S.) empire attacks Chavez so much?"
"The U.S. government is afraid, yes afraid that the people of the United States will learn the real truth," Chavez said, citing his social programs for the poor funded with Venezuela's oil wealth.
"Because, if the people of the United States, those millions and millions of poor people...if that nation realizes what is truly happening here, there would be a revolution in the United States," Chavez said, eliciting applause from Penn.

http://www.mytelus.com/ncp_news/article.en.do?pn=arts&articleID=2731974

Doesn't sound like Chavez is a liability at all. Seems he's more popular than
ever.

The Corinthian

RedPlanet wrote:

Bottom line is: Venezuelan's do not need to meet your arbitary litmus test in order to feel their natural resources were being exploited in a manner that was not beneficial to them.

The only person coming out with arbitrary litmus tests here is you. You contend that Venezuela is exploited simply because it (or its leader) choose that it is – which is completely arbitrary. What I’ve suggested is a comparative assessment that seeks to put such claims in perspective – which, oddly enough, is not arbitrary.

RedPlanet

The Corinthian wrote:

The only person coming out with arbitrary litmus tests here is you. You contend that Venezuela is exploited simply because it (or its leader) choose that it is – which is completely arbitrary. What I’ve suggested is a comparative assessment that seeks to put such claims in perspective – which, oddly enough, is not arbitrary.

So Corinthian, just for laughs, tells us the specifics of your suggestion.
We can't have you moving goal posts again.
What absurd criteria would you have Venezuela meet, in order to be able to claim that their own natural resources were exploited in such a way that was not beneficial to them. :rolleyes:

The Corinthian

RedPlanet wrote:

So Corinthian, just for laughs, tells us the specifics of your suggestion.

Who’s suggesting specifics? All I’m suggesting is that if you make a claim (that Venezuela was being exploited for her oil), you back it up with evidence rather than take Chavez’s word for it.

If Venezuela was getting much the same or even better royalties as other oil producing nations, then that is evidence that either they were not being exploited or that everyone is – and if you want to contend the latter you’d really need to find evidence to support that claim too.

That’s the basis of any debate – if you have a claim you must back it up. The criteria need not be black or white and may even be circumstantial, but simply saying something is true “just because” does not wash.

What absurd criteria would you have Venezuela meet, in order to be able to claim that their own natural resources were exploited in such a way that was not beneficial to them. :rolleyes:

Yet by your logic they should be free to set their own criteria of what is exploitation or not. By the same logic the oil companies can argue that they are being exploited for their investment in exploration and infrastructure – because they feel so. Neither is a terribly objective way of assessing things.

Not that you care either way because you had already decided they were being exploited before seeking any facts. Your faith is impressive.

RedPlanet

The Corinthian wrote:

Who’s suggesting specifics? All I’m suggesting is that if you make a claim (that Venezuela was being exploited for her oil), you back it up with evidence rather than take Chavez’s word for it.

Nope, here's what you said: "What I’ve suggested is a comparative assessment that seeks to put such claims in perspective"

And i responded by asking for specifics about your suggestion.

The Corinthian wrote:

Yet by your logic they should be free to set their own criteria of what is exploitation or not.

Yes that's it exactly.
Its Venezuela's natural resource, the only persons qualified to determine if they get value for it, is of course the people of Venezuela.

bobbyjoe

How can someone argue for a foreign multinational against the actual people of the country getting benefit from that countries resources. Only thing i can think of is an ideological reason. Only privatisation works anything lefty is inherently bad.

The Corinthian

RedPlanet wrote:

Nope, here's what you said: "What I’ve suggested is a comparative assessment that seeks to put such claims in perspective"

And i responded by asking for specifics about your suggestion.

To which I responded - I suggested looking at the royalty deals of different oil producing countries a page or two ago, for example.

Yes that's it exactly.
Its Venezuela's natural resource, the only persons qualified to determine if they get value for it, is of course the people of Venezuela.

Venezuela must decide what it wants for it, but that does not mean that the price it can demand is fair, for either it or the buyer. Otherwise you will always find that the seller will consider the maximum price to be 'fair' because they will always seek to maximize the value they can get from it - that's the nature of commerce. Remember that by your logic, if oil companies refused to deal with Venezuela and withhold investment, that would equally because they "determine if they get value" of their investments.

Given the price of oil at present, Venezuela is in a good position as it can exploit the market to get far more value, but that does not mean that this is either fair or in line with other oil producers.

In essence there is no economic basis for your 'criteria'. Indeed, it's more a sound bite than an argument.

The Corinthian

bobbyjoe wrote:

How can someone argue for a foreign multinational against the actual people of the country getting benefit from that countries resources. Only thing i can think of is an ideological reason. Only privatisation works anything lefty is inherently bad.

Who said anything about privatization?

Regardless of whether you’re left or right wing, there are certain basic economic fundamentals that you have to adhere to. Well meaning, but naive economics have repeatedly resulted in disastrous consequences for those very people they were promising to help, precisely because they chose to ignore those principles. Both left and right have screwed up in this regard.

People here have repeatedly attempted to push an economic question on purely ideological grounds. When asked why something economic is exploitative, we’re given a fuzzy ‘power to the people’ line. And let’s be clear on this – ultimately this is an economic issue.

RedPlanet

The Corinthian wrote:

To which I responded - I suggested looking at the royalty deals of different oil producing countries a page or two ago, for example.

Venezuela must decide what it wants for it, but that does not mean that the price it can demand is fair, for either it or the buyer.

In essence there is no economic basis for your 'criteria'. Indeed, it's more a sound bite than an argument.

I have not even attempted to construct an argument on economics.
I am aserting the absolute sovereignty over natural resources that all member states of the UN have.
http://www.unhchr.ch/html/menu3/b/c_natres.htm
Read here.

1. The right of peoples and nations to permanent sovereignty over their natural wealth and resources must be exercised in the interest of their national development and of the well-being of the people of the State concerned.

2. The exploration, development and disposition of such resources, as well as the import of the foreign capital required for these purposes, should be in conformity with the rules and conditions which the peoples and nations freely consider to be necessary or desirable with regard to the authorization, restriction or prohibition of such activities.

4. Nationalization, expropriation or requisitioning shall be based on grounds or reasons of public utility, security or the national interest which are recognized as overriding purely individual or private interests, both domestic and foreign.

There is a caveat for you here:

However, upon agreement by sovereign States and other parties concerned, settlement of the dispute should be made through arbitration or international adjudication.

Now all you have to do is demonstrate where a multinational has won a case in the world court against Venezuela over it's oil.
Good luck!

The Corinthian

RedPlanet wrote:

I have not even attempted to construct an argument on economics.

Well, I'm glad you've finally accepted that much.

democrates

The economics for oil are quite unique, the OPEC cartel (a public conspiracy?) has a large impact on this market, new finds are falling, peak oil is in play. So while comparatively high Venezuelan royalties might by normally mean investors go elsewhere, they've few places to go. That said, all but one of the oil companies have cut deals with Venezuela, they're still there making a profit.

Then there's the dependence of the global economy on oil, but if there's a problem with ransom level oil prices, I don't think it would be fair to single out Venezuelan oil policy.

Considering how Iraq was singled out however - the American and British taxpayers paid for the war, soldiers and citizens have been maimed and killed, Halliburton, Raytheon et al have made huge profits. It's very clear who bears risk and who gets the reward in that scenario. Some investors can mark Iraq as a success, they got richer. What was scoffed at as conspiracy theory has transpired in fact.

I don't think the Chavez administration is safe from these people and their political puppets, it would be wiser to have a robust democracy with direct input from the grassroots right to the top, the powerful head is too easily cut off. Besides the threat from murderous profiteers, if Chavez chokes on a chicken bone or something will the work continue as before?

RedPlanet

Well it's arogant of us to pretend to know what's best for Venezuela.

A friend of mine from there is adamant that Venezuela needs a strong-man type of leader. While he expressed concern about Chavez's propensity to be authortarian, he believes Chavez is putting the country on the right course.

I was hoping to get him to post here, but i guess he thinks it a waste of his time.

The Corinthian

RedPlanet wrote:

Well it's arogant of us to pretend to know what's best for Venezuela.

For once I'd actually agree with you.

A friend of mine from there is adamant that Venezuela needs a strong-man type of leader. While he expressed concern about Chavez's propensity to be authortarian, he believes Chavez is putting the country on the right course.

Again, I don't necessarily disagree. There are many countries that could potentially benefit from the jolt that a 'strong leader' would give, the only problem being that the cure can often be worse than the disease.

But again, my main point here has never been so much against Chavez, or even his policies - some of which I agree with - but with the cult of personality he seems to enjoy outside Venezuela.

I was hoping to get him to post here, but i guess he thinks it a waste of his time.

I don't blame him. You need to waste a little time during the day though.

RedPlanet

Chavez proposes a six-hour work day.
http://www.reuters.com/article/wtMostRead/idUSN1523027720070816

But what would that mean? That people have like.....more time to spend with their families?
Why would an evil-doer like Chavez want that?

Sands, would you oblige and spin this for us?

regi

I don't think its really necessary to spin that particular speech. I mean, it did include provisions to make him the everlasting God Emperor of Venezuela...

http://www.reuters.com/article/worldNews/idUSN1526395420070816

bobbyjoe

regi wrote:

I don't think its really necessary to spin that particular speech. I mean, it did include provisions to make him the everlasting God Emperor of Venezuela...

http://www.reuters.com/article/worldNews/idUSN1526395420070816

There's the problem with reporting about Chavez everything gets spun and exaggerated. So far in this thread he closed down a tv station (he did not). He wants to shut down CNN (yep right), he wants to be a permanent dictator (no indication of that) etc etc.....

quirk.

The following is an interesting article as it criticises Chavez from a left wing point of view rather than the usual attacks from the right which we are all used to. It also raises some excellent points.

Hugo Chavez Has an Oil Strategy...But Can This Lead to Liberation?

Dirk Gently

regi wrote:

I mean, it did include provisions to make him the everlasting God Emperor of Venezuela...

Like how Bertie is the everlasting God Emperor of Ireland and Gordan Brown is the everlasting God Emperor of the UK?

The Corinthian

bobbyjoe wrote:

There's the problem with reporting about Chavez everything gets spun and exaggerated. So far in this thread he closed down a tv station (he did not). He wants to shut down CNN (yep right), he wants to be a permanent dictator (no indication of that) etc etc.....

He effectively has shut down - more correctly crippled - a TV station as it now can only reach a small fraction of it's previous viewers. He has threatened to censor CNN and other foreign news agencies or close down their Venezuelan offices. And he has implemented or is in a process of implementing laws that are removing the limits on presidential power that existed.

All these things are factually correct. Of course none mean that he will become a dictator, but they are indicators that this is where he may well go - unless you're a Chavez fanboy and he can do no wrong, that is.

bobbyjoe

The Corinthian wrote:

He effectively has shut down - more correctly crippled - a TV station as it now can only reach a small fraction of it's previous viewers. He has threatened to censor CNN and other foreign news agencies or close down their Venezuelan offices. And he has implemented or is in a process of implementing laws that are removing the limits on presidential power that existed.

All these things are factually correct. Of course none mean that he will become a dictator, but they are indicators that this is where he may well go - unless you're a Chavez fanboy and he can do no wrong, that is.

The reasons for not renewing RCTV's license have been discussed pages ago on this thread, their pretty good in my opinion. The owners are lucky not to be in prison.
The lies spread about Chavez are to do with him moving away from the established subservient position that the west likes to have those south American countries in.