At the turn of the century most Americans were agrarian. Oil and democracy mixed quite well, thankyou, and led to a prolifically productive taxpaying and agitating middle class.
yitbos
Feb 1, 2003 - Venezuela's oil output may be halfway back - Oil chief: PDVSA's only duty is to benefit treasury***Rodriguez said there would be no return for thousands of fired Petroleos de Venezuela workers, whom he accused of sabotaging the country's oil industry and betraying the nation by trying to topple President Hugo Chavez. PDVSA employees who were pardoned for their role in a failed coup attempt against Chavez last April had re-offended by organizing the strike, Rodriguez said. The PDVSA chief said he had fired almost every one of PDVSA's 700 senior executives for joining the strike. The number of dismissed workers already topped 5,300 and could reach 6,000, he added.
Rodriguez, a former communist guerrilla, said PDVSA had grown fat during the past 20 years. "PDVSA should be nothing more than an instrument to secure maximum benefit from the export of (oil) through its contribution to the treasury," Rodriguez said.***
[Rodriguez used to sabotage oil pipelines]
April 15, 2003 - Left turn: 'Revolution' hits Venezuela's oil culture - PDVSA beachhead for Chavez's vision*** In addition to the classless cafeteria, volunteerism is up, and salaries are said to be on their way down. The dress code has been loosened, and in some departments the high-five has replaced the curt nod in the hallways. "There has been a change of mentality in all levels of the company," says a member of PDVSA's board of directors, who speaks on the condition of anonymity. "We believe that PDVSA should be subordinated to the needs of the state. For us, job No. 1 is fighting poverty."
……………. "We're here to establish a beachhead, move in, and clean the place up," he says. "When we are finished ... we will move on." A humanitarian oil company is almost a contradiction in terms, though, and many critics are dismissive of the lofty sentiments heard inside the company. "Plain and pure rhetoric," says Edgar Leal, senior associate with Cambridge Energy Research Associates, in Cambridge, Mass. "What are they going to do, have PDVSA start distributing food? They have a business to run."
The man in charge of this business is Ali Rodriguez, a former guerrilla fighter who ran the OPEC oil cartel until he was installed by Chávez as company president. Mr. Rodriguez has not won over his critics, including the far left, who question his decision to eschew an oil embargo against the United States by countries opposed to the war in Iraq. But Rodriguez has signed on with the government game plan - to divert some revenue to federal coffers that would otherwise be reinvested in PDVSA. The government says infusions of cash into schools and hospitals has already pushed down illiteracy and infant mortality rates.
Previously, PDVSA's management used its considerable degree of autonomy to aggressively explore for oil, develop new technologies, and acquire overseas assets. The new PDVSA management says much of that money was wasted, and points to operating costs that are three times higher than other oil majors as proof. Officials at the energy ministry say that restructuring will save $1 billion a year.
But critics say the new system can't be sustained. "Chávez and Rodriguez will probably use whatever they can get out of PDVSA for projects this government wants to do," says Michael Coppedge, a political science professor and Venezuela specialist at the University of Notre Dame in South Bend, Ind. By some measures, PDVSA's production capacity has already suffered as a result. The company was operating 120 oil rigs only four years ago. Today that number has fallen to less than 40. "They may be able to extract more revenue from PDVSA than before for a short time, and then production capacity will fall, and the oil industry will deteriorate and won't be able to produce as much and earn as much," Mr. Coppedge adds……………..***
May 7, 2003 - New Venezuela `oil show' makes Houston debut*** We could brush off Venezuela's travails as yet another internal strife in a much tormented oil producing country with an endemic history of corruption and ineptitude. But this is too close to home, with Venezuela's oil playing a huge role on the U.S. energy security and a direct linkage with our gasoline prices. Venezuela is the largest exporter of refined products to the United States and holds a significant position in U.S. domestic refining capacity. PDVSA also owns Citgo, one of the largest retailers of gasoline in this country. What has been going on in Venezuelan oil production the last few months?
After a devastating and permanent removal from the market of at least 250 million barrels during the strike, the country's oil production is now about 2.6 million barrels a day, compared with 3.4 million before the PDVSA strike. This partial rebound is misleading because 1 million barrels a day comes from foreign company "associations" in Venezuela and 800,000 barrels a day come from the giant North Monagas and El Furrial fields. These fields are now being produced at full throttle with many technical questions as to the long-term damage that this overproduction may cause. Decapitation of the engineering staff has led to a big drop in production from the more challenging fields. Such a decline will accelerate further and will become devastating next year and thereafter. It is not just the dearth of know-how; there will be no money to reinvest.
PDVSA today has the largest debt in its history. Service companies, oil carriers and suppliers are now owed probably $3 billion to $5 billion, accumulated over the last five months. Coupled with the fact that the Exim Bank has eliminated all credit guarantees for Venezuela and Chavez's own debt to his constituents, whose bribing will have to be manifested in increased welfare spending and giveaways, point toward a very turbulent time ahead. It will be interesting and somewhat breathtaking to watch the "show" by the new PDVSA delegation this week in Houston. ***