Posted on 05/20/2005 5:28:28 AM PDT by Brilliant
"We have a little problem," Venezuelan President Hugo Chávez reportedly told Venezuelans on May 3, "and we are fixing it."
The "problem" is the drop in output by the Venezuelan state-owned oil company known as PdVSA. The Chávez fixes, thus far, have entailed sending military troops to the oil-rich west of Venezuela to investigate "management errors" and allegations of sabotage, while in Caracas the government is threatening foreign oil companies with contract cancellations and tax hikes...
Today Chávez claims that production is down by a mere 200,000 b/d for a daily output of 3.1 million barrels. Industry experts dispute this...
On May 4, Alberto Ramos, an analyst for Goldman Sachs' Emerging Markets Economic Research, noted that since the strike local and international oil analysts have consistently put PdVSA production some 500,000 to 600,000 b/d below government claims...
Venezuela's El Nacional (a daily newspaper) Web site issued a similar report on May 15 -- according to a translation by BBC Monitoring Americas: "An extensive survey of oil industry engineers, geologists, geophysicists and experts indicates that corrective measures have not been taken and the decline in Venezuelan oil production is nearing 1,000,000 b/d...
In his report, Mr. Ramos also noted that "several oil analysts" attribute the company's inability to return to pre-strike levels of production to "corruption, mismanagement, inadequate investment levels, sloppy maintenance, and lack of qualified technical personnel."
Maintenance, management and qualified personnel can be traced to the strike and the layoffs. It is also possible that disgruntled employees are not toiling as they did when they felt they were measured by their work, not their politics. Yet human capital is but one factor of production. Investment is also scarce and likely to grow scarcer as Chávez puts the squeeze on foreign oil companies...
(Excerpt) Read more at online.wsj.com ...
Some good, patriotic Venezuelan should step up and put two in Castr-, um, Chavez's cap.
Mike
Oil is the life support for this failed system. If/when it fails, the whole thing will collapse. Atlas is starting to shrug in Venezuela.
I have a neighbor who is a green card holder here - he says that all his friends that are college graduates and want to work hard and succeed have gotten out of the country.
Venezuela is in for hard times. The people that produce are not interested in being Chavez' peasants.
Thank God Castro didn't have the luck to have oil wells instead of tobacco!
Time for a Venezuelan Pinochet.
You mean 2 in the beret.
That's pretty funny, isn't it? The notion that China and Cuba are now going to teach Venezuela how to run an oil industry. How the mighty have fallen!
Beret, cap, hat... as long as they end up rattling about in his noggin, I'd be pleased.
Don't laugh. The chinese are moving into key locations all over the world. They are moving into Zimbabwe. Mugabe is giving the land seized from white farmers to chinese companies to run because the locals who took over a re incompetent. And look who's in Panama babysitting the canal. The chinese are looking for resources everywhere and they don't have the 'reputation' of being white colonialists. They are trying to set up shop in corruot, failed states because they see potential there for themselves and they know how to function in a corrupt environment. They are also in Canada, buying up the tar sands oil resources. The chinese are being very stealthy about this.
Sure, seventy consecutive years of bad weather explains the bad crops in the USSR but how does the weather affect oil production?
The Chinese are being aggressive in their quest for oil, but they don't have the expertise to teach anything to the Venezuelans about the oil industry. Venezuela was just a few years ago the World's no. 3 producer of oil. China is so pathetic, it can't even find oil on its own territory, even though there are very likely vast resources.
No, China's role in all this is simple: They'll give the Venezuelans some of those dolllars they don't know what to do with, and the Venezuelans will give them oil.
At least up to this point. While indeed Cuba has oil, they are nowhere near self-sufficient [the CIA World Factbook lists Cuban oil production as 77,900 bbl/day (2004 est.) and oil consumption at 163,000 bbl/day (2001 est.)]; however, there have been indications that there may be more substantial offshore oil deposits near Cuba. There were at least two Canadian companies looking just recently.
Makes sense to me.
"We need a good old fashioned coup! Come on CIA..... Do your thing...."
The CIA is not competent. Their testicles have been cut off by politicians.
Chavez knows how to skim his off the top.
No OIL FOR YOU! (Done in the best Soup Nazi voice)
No socialisism for oil
On May 4, Alberto Ramos, an analyst for Goldman Sachs' Emerging Markets Economic Research, noted that since the strike local and international oil analysts have consistently put PdVSA production some 500,000 to 600,000 b/d below government claims...
In his report, Mr. Ramos also noted that "several oil analysts" attribute the company's inability to return to pre-strike levels of production to "corruption, mismanagement, inadequate investment levels, sloppy maintenance, and lack of qualified technical personnel."
>>The Chinese are being aggressive in their quest for oil,
>>but they don't have the expertise to teach anything to
>>the Venezuelans about the oil industry. Venezuela was
>>just a few years ago the World's no. 3 producer of oil.
>>China is so pathetic, it can't even find oil on its own
>>territory, even though there are very likely vast
>>resources.
If you are going to make sweeping claims like this please back them up. According to the DOE:
Most Chinese oil production capacity, close to 90%, is located onshore. One field alone, Daqing in northeastern China, accounts for about 1.0 million bbl/d of China's production, out of a total crude oil production of around 3.4 million bbl/d. Daqing is a mature field, however, having begun production in 1963, and production fell by 3.5% in 2003. At China's second-largest producing field, Liaohe in northeastern China, CNPC has contracted with several foreign firms for work to enhance oil recovery and extend the life of the field. Chinese authorities announced a "major" new find in April 2004 in the area of the existing Shengli field in the northeast, but it is still under assessment. Government priorities focus on stabilizing production in the eastern regions of the country at current levels, increasing production in new fields in the West, and developing the infrastructure required to deliver western oil and gas to consumers in the East. Offshore development also is a high priority. Chinese officials have said that they expect production in Xinjiang to reach 1 million bbl/d by 2008, but that seems ambitious, given that transportation of that oil to consumers in the East remains a major obstacle.
Recent offshore oil exploration interest has centered on the Bohai Sea area, east of Tianjin, believed to hold more than 1.5 billion barrels in reserves, and the Pearl River Mouth area. ConocoPhillips announced in March 2000 that it had completed its appraisal drilling of the Peng Lai find in Block 11/05, and would proceed with development. Commercial production began in December 2002, and is around 32,000 bbl/d as of mid-2004. CNOOC signed a production sharing contract with Canadian independent Husky Oil in July 2001 for Block 39-05 in the Pearl River Mouth, near the Wenchang 13-1/13-2 blocks, where Husky Oil and CNOOC currently are producing about 50,000 bbl/d. Another major offshore oilfield has been developed in the Pearl River Mouth area by a consortium including ChevronTexaco, ENI, and CNOOC. The field began production in February 1999. ChevronTexaco also concluded an agreement with CNOOC in October 2002 for the development of the Bozhong field in the Bohai Sea, which has reserves estimated at 1.3 billion barrels. Meanwhile, improvement in Sino-Vietnamese relations has opened the way for oil and gas exploration in the Beibu Gulf (known in Vietnam as the Gulf of Tonkin). China and Vietnam signed an agreement in December 2000 which settled their outstanding disputes over sovereignty and economic rights in offshore areas near their border. CNOOC opened a tender for 10 new exploration blocks in May 2004.
http://www.eia.doe.gov/emeu/cabs/china.html#oil
A few fields in the range of 1-2 billion barrels a day would not constitute vast resources- exploration is being done in part by our majors. China and the majors are looking though.
and http://www.asponews.org/HTML/Newsletter40.html#C342
In general, China has been thoroughly explored but found to have only limited potential due to inadequate source-rocks and a complex tectonic history, meaning that individual fields are for the most part small to moderate in size. Production operations have not been blessed with the most advanced technology, but those limitations were partly compensated for by close drilling.
Desultory exploration commenced early in the last Century, but did not take off until in earnest until after the Second World War when relative political stability was imposed by the Communists. Discovery peaked in 1959 with the giant Daquing Field, at which point some 300 wildcats had been drilled. Exploration was stepped up subsequently with the drilling of some 2000 further wildcats, but the results have been discouraging. It seems that a total of about 55 Gb have been discovered, of which 30 Gb have been produced. Future discovery is here estimated at about 6 Gb. Production commenced in 1942, rising gradually to 3.4 Mb/d in 2003, which corresponds to the midpoint of depletion, meaning that it is likely to be close to peak. If so, production is set to decline at about 4% a year to respectively 2.5 Mb/d by 2010 and 1.7 Mb/d by 2020. China’s consumption has been growing rapidly from 0.2 Mb/d in 1965 to 5.4 Mb/d last year, making it second only to the United States. Two million new cars have taken to the roads over the past twelve months. Imports have risen to 2Mb/d and are set to grow still higher as indigenous production declines, unless the economy slumps, as seems almost inevitable.
China's geology does not support the presence of large quantities of oil.
>>No, China's role in all this is simple: They'll give the
>>Venezuelans some of those dolllars they don't know what
>>to do with, and the Venezuelans will give them oil.
And given that Venuzuala is a major supplier of US imports that is a significant problem for Americans.
Your post does not rebut what I said. It merely says that the Chinese have some domestic production. So what? I never said they did not. You should note, though, that a lot of it is actually in the control of foreign companies, as even your own post mentions. China's oil industry is like the rest of their economy: backward. Venezuela, on the other hand, once had one of the most advanced oil industries in the world, largely because of American expertise. Now it looks like Chavez needs to get a refresher course from China.
Good luck.
You indicated that Chaina had vast untapped reserves, I provided a source that indicated that the geology there does not support the formation of oil. If you have a source indicating differently please post it.
I don't see how a torpedo in the hull of a Chinese ship far from land, mysteriously disappearing, could hurt anything. A couple of expensive loads lost and they's get the hint. bugger off!
Maybe I should not have used the word "vast." I wasn't trying to convince you that they had "vast" resources as compared for example to the Arabs or Venezuelans. The truth is that no one knows what they've got because the exporation in China has just begun in recent years.
I was trying to convince you that they aren't the people to ask if you need help with your oil industry. If anything, the fact that they don't have "vast" resources in the sense you are talking about just proves my point. They've got little experience, compared to Venezuela. If Chavez is looking to China for help getting his oil industry going, then that's pretty pathetic.
thanks for posting.
i read this in today's wsj and laughed.
so learners--didn't they learn anything from the soviet union?
>>I was trying to convince you that they aren't the people >>to ask if you need help with your oil industry.
On that we would agree. Still the issue with the Chinese involvement in Venuzuala is that it gives them more influence in the country to shape policy and to guide the destination of Venuzuala's oil production. We as a country rely on Venuzuala for oil to the tune of 1.3 million barrels a day.
http://www.eia.doe.gov/emeu/cabs/usa.html#oil
That makes Venuzuala the fourth largest source for imported oil following Canada (1.6 million barrels a day), Mexico (1.6 million barrels a day) and Saudi Arabia (1.5 million barrels a day). This Chinese infiltration and deal making in Venuzuala (but also Canada, Russia, etc...) is a threat and given our dependence on foreign oil (11.8 million barrels a day out of 20.4 million barrels a day total consumed) and reliance on cheap Chinese imports a very troublesome one to deal with.
Increased domestic drilling is not likely the solution given that we have only 2% of world reserves but 8% of world production and 25% of world consumption.
http://www.xecu.net/thorn/PO/May11-2005-4thTalk.htm
THE NATIONAL SECURITY AND PETROLEUM DEPENDENCE PROJECT
Findings and Recommendations
Findings: U.S. dependence on foreign petroleum poses a serious risk to our national and homeland security as well as our economic well-being; Increasing petroleum consumption by developing economies like China and India will exacerbate this risk; Some foreign interests have used oil revenues to purchase destabilizing weapons or to support terrorism; With just 2 percent of the world's oil reserves and 25 percent of current world consumption, the U.S. cannot eliminate its need for imports through increased domestic production alone; equivalent demand-side measures are essential; Technologies exist today that can improve efficiency and produce clean, domestic petroleum substitutes; The cost of action is far smaller than the risk of inaction, and there is no excuse for further delay.
Sure... The growth of Chinese demand definitely increases the cost of our oil. On the other hand, I'm not sure it matters so much whether it comes from Venezuela or someplace else. It's a world market.
It makes little sense for the Chinese to get their oil from Venezuela because the transportation costs would be so great compared to other alternatives. It also makes little sense for Venezuela to sell its oil to China for the same reason.
The truth is that Chavez needs the US market, and if he can't deal with that reality, then it's going to cost him. It'll cost us too, but not merely as much as it will cost him. He's a smaller portion of our consumption than we are of his production.
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