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A Confederacy of Dunces

January 14th, 2009 by Chuck · 8 Comments · Foreign Affairs

According to this article, Hugo Chavez is willing to allow foreign oil companies to begin investing in Venezuelan oil projects again, since Venezuela’s state oil company, Petróleos de Venezuela SA, is in dire need of new victims to despoil. 

It is a telling sign of how deeply the global economic crisis has cut: President Hugo Chávez, who initially reveled in describing the crash as proof of capitalism’s flaws, is now quietly courting Western oil companies once again.

Until recently, buoyed by the surging price of oil, Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with the tax authorities and imposing a series of royalty increases.

But faced with the plunge in oil prices and a decline in domestic production, senior officials here have quietly begun soliciting some of the largest Western oil companies in recent weeks, including Chevron, Royal Dutch Shell and Total, in the hope of getting them to invest in Venezuela again.

It is hard to imagine any company would consider accepting such an invitation to disaster.  Nevertheless, they are considering it.     

But energy executives here speak with restrained optimism. Nineteen companies paid $2 million each last month for data on areas open for exploration, twice what such data costs elsewhere.

Perhaps the oil companies can make some kind of profit from such ventures, even after Chavez nationalizes them, since he is magnanimous enough (sarcasm) to allow them to remain as minority partners after the nationalizations.  But that is no excuse for aiding and abetting the rule of an anti-American socialist, who allies himself with all of America’s enemies.

None of this seems to register with oil company executives, who would rather “go along to get along” than stand on such old fashioned grounds as principles, such as justice, (freely negotiated) contracts, and property rights.  They are dunces, the proverbial type who will sell our enemies the rope with which to hang us.   These are the same executives who support the anthropogenic global warming hysteria that demonizes their own industry, and the catastrophic legislation to slay that mythical dragon.

“If re-engaging with foreign oil companies is necessary to his political survival, then Chávez will do it,” said Roger Tissot, an authority on the Venezuelan oil industry at Gas Energy, a Brazilian consulting firm focusing on Latin America. “He is a military man who understands losing a battle to win the war.”

There is no secret about Chavez’s intentions here.  He is saying: “I need some useful idiots to help me fight America.  Any takers?”  And oil executives are not being wall-flowers in their eagerness to dance to Hugo’s tune.

8 Comments so far ↓

  • Harold

    Interesting. I’m in oil, and while unfamiliar with upstream operations this may not be such a bad idea–getting the data that is. Say a company gets the geological info and Chavez is thrown out. Things *might* improve and it’s possible, but perhaps not likely, that a (much) more pro-freedom individual could replace him. This would put them ahead as they already have a good idea where to bid. A lot of if’s, but definitely if they go into business with this guy then they deserve what they get. And honestly, 2 million ain’t a whole lot either.

    BTW, Venezuelan crude is naaasssty :O

  • Bill Brown

    Even more amazing, apparently Petróleos de Venezuela SA hasn’t been running the nationalized assets and fields very well. Maybe the foreign oil companies can just come back long enough to get things back on track and then be run out on a rail again. That’d be swell.

  • Burgess Laughlin

    “. . . this may not be such a bad idea–getting the data that is.”

    Buying from statists is supporting statists. Supporting statists is a terrible, suicidal idea.

  • Bill Brown

    And $2 million may not be much to the foreign oil companies, but to a dictator living expropriation to expropriation it means subjugating the people for a month longer (or two years, in the case of North Korea).

  • Harold

    Point taken.

  • Bill Brown

    Also, I just found a link suggesting that Chavez needs oil at or above $97 per barrel in order to pay for his government.

  • Two--Four

    […] Royal Dutch Shell, I think I would be looking into buying tactical jets for the explicit purpose of bombing Hugo Chavez right straight off the planet. Jan 17, 09 | 11:09 am AxeBitesVarious guitars I see floating by, mostly Gibson and mostly eBay. […]

  • Peter Murphy

    Like every dictator, Chavez is incapable of creating the profits necessary to sustain his tyranny. His only recourse is to loot… and loot always runs out.

    Now, when his nationalized wells don’t finance his agenda, is a perfect time for his victims – the oil companies – to exact justice: let the world know that they are going to watch him starve.

    The sooner foreign businessmen let him starve, the sooner can the people of Argentina regain their rights. In the meantime, the $2M could be well spent educating American voters about the right to drill offshore.

    Oh, but, I forget! Dunces don’t educate – except in serving as bad examples…