Venezuela takes operations from big oil companies

[Ban Hammer 14,297]

PUERTO PIRITU, Venezuela (Reuters) - Venezuela stripped the world's biggest oil companies of operational control over massive Orinoco Belt crude projects on Tuesday, a vital move in President Hugo Chavez's nationalization drive.

The May Day takeover came exactly a year after Bolivian President Evo Morales, a leftist ally of Chavez, startled investors by ordering troops to seize his country's gas fields, accelerating Latin America's struggle to reclaim resources.

"The importance of this is that we are taking back control of the Orinoco Belt which the president rightly calls the world's biggest crude reserve," said Marco Ojeda, an oil union leader before a planned rally to mark the transfer.

The four projects are valued at more than $30 billion and can convert about 600,000 barrels per day (bpd) of heavy, tarry crude into valuable synthetic oil.

U.S. companies ConocoPhillips, Chevron, Exxon Mobil, Britain's BP, Norway's Statoil and France's Total agreed to obey a decree to transfer operational control on Tuesday, although the OPEC nation complained ConocoPhillips was somewhat resistant.

In Puerto Piritu, near the facilities that refine Orinoco crude, workers prepared early on Tuesday to celebrate the takeovers, displaying Venezuelan red, blue and yellow flags and daubing a wall with Chavez's slogan: "Homeland, Socialism or Death."

The anti-American leader was also in a festive mood before a rally marking what he called the end of an era of U.S.-prescribed policies that opened up the largest oil reserves in the hemisphere to foreign investment.

"Open investment will never return," he said late on Monday to thousands of cheering workers dressed in the signature red of his self-styled leftist revolution at a rally for workers rights.

"We are sealing up that open investment era and burying it deep down in the Orinoco oil reserve," he added.

Buoyed by an oil price bonanza in the No. 5 crude exporter to the United States, Chavez is popular among the majority poor for spending freely on schools, clinics and food handouts.

The man who calls Cuban leader Fidel Castro his mentor has vowed to take at least 60 percent of the projects, radicalizing his policies as he rules by decree and politicizes the army, state oil company and judiciary.

He is also quickly nationalizing power utilities and the country's biggest telephone company.

In the oil projects, the companies have agreed to hand over operations but are still discussing continued shareholding and compensation in sometimes contentious negotiations before a deadline next month.

Despite being the only targeted company that refused to sign an agreement last week over the nationalization, ConocoPhillips said it cooperated on Tuesday "to ensure a safe, orderly transfer of operations."

"Agreements have not been reached with respect to ConocoPhillips' future participation in these projects or the compensation the company will receive," it added in a statement.

Industry analysts fear Venezuela's state oil company PDVSA could ultimately run into production and safety problems when it loses the management and technology of the experienced majors.

As he shrinks the private companies' role, Chavez has formed joint ventures with allies such as China, Belarus and Iran involving many state entities that are unfamiliar with developing such crude.

Still, Chavez hailed Tuesday's takeovers as the South American nation reclaiming its sovereignty.

"The wheel has turned full circle," he said. "Long live PDVSA, long live the workers of PDVSA."

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[homesick_american 1]

The guy is a dictator in all but name.

[Saddle Bronc 124]

The guy is a CF dictator in all but name.

[Robor007 0]

We can complain all we want about high gas prices but until we do something it's just hot air. Just look around on the road next time you're in traffic. Look at all of the huge gas guzzling single occupant vehicles. Want to pay less for gas? Buy less gas - it's that simple. Yes, I understand large families need larger vehicles but do they need an H2 or Escalade or Excursion? Why not get a large sedan or wagon or minivan instead? They aren't exactly economy vehicles but they're more efficient than most SUV's and usually cost less and ride better.

[homesick_american 1]

We can complain all we want about high gas prices but until we do something it's just hot air. Just look around on the road next time you're in traffic. Look at all of the huge gas guzzling single occupant vehicles. Want to pay less for gas? Buy less gas - it's that simple. Yes, I understand large families need larger vehicles but do they need an H2 or Escalade or Excursion? Why not get a large sedan or wagon or minivan instead? They aren't exactly economy vehicles but they're more efficient than most SUV's and usually cost less and ride better.

We're buying my grandfather's minivan; the thing gets 19mpg city/26 mpg highway. That isn't anything to brag about. Basically we're buying the car for two reasons: A.) Makes things easier on my mom and uncle with regards to settling grandpa's estate, one less thing for them to worry about and B.) It makes things easier for us too.

When we buy a second car we'll get a Yaris or something to make up for the minivan's sh!tty gas mileage.

[Robor007 0]

We can complain all we want about high gas prices but until we do something it's just hot air. Just look around on the road next time you're in traffic. Look at all of the huge gas guzzling single occupant vehicles. Want to pay less for gas? Buy less gas - it's that simple. Yes, I understand large families need larger vehicles but do they need an H2 or Escalade or Excursion? Why not get a large sedan or wagon or minivan instead? They aren't exactly economy vehicles but they're more efficient than most SUV's and usually cost less and ride better.

We're buying my grandfather's minivan; the thing gets 19mpg city/26 mpg highway. That isn't anything to brag about. Basically we're buying the car for two reasons: A.) Makes things easier on my mom and uncle with regards to settling grandpa's estate, one less thing for them to worry about and B.) It makes things easier for us too.

When we buy a second car we'll get a Yaris or something to make up for the minivan's sh!tty gas mileage.

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

[almaty 19]

i agree, if chavez wants to do it, there is little recourse...things happen when your country is a junkie and mainlines crude

[Saddle Bronc 124]

US has never figured out one simple power, that of being largest buyer.

Special case of this was shown in 1952, against Mousadegh (of Iran). A buycott by US on Iranian oil would have brought Mousadegh in screaming for negotiations--as no one would simply write-off a customer accounting for easily HALF of sales (this was true at that time). Mousadegh staying in power then-->no 1979 "Khomeini Revolution".

[Ban Hammer 14,297]

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

jeep and dodge seems to have the rep of bad milage.

[almaty 19]

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

jeep and dodge seems to have the rep of bad milage.

and breaking down

[Saddle Bronc 124]

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

jeep and dodge seems to have the rep of bad milage.

and breaking down

"There are very good reasons that they're named DODGE!"

Edited May 1, 2007 by CherryXS

[homesick_american 1]

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

Hahaha...yeah, 19/26 isn't great but like I said, we're mainly getting it to give my mom and uncle one less thing to worry about re: Grandpa's estate, and to make life easier for us so we don't have to go around used car lots looking for a car. Grandpa took good care of his cars and tho it's 7 years old, it only has 27k miles on it. Once both of us are in work we'll need another car, so we're going to get a real gas miser to make up for the van. We only plan to keep the van maybe 2-2.5 years anyway, but we may chuck it sooner if gas gets much more expensive.

I never in a million years thought I'd own a car that got such sh!tty mileage. The things you do for family *shaking head*!

[homesick_american 1]

That (19/26) isn't great but it's not that bad either - especially given you've got a lot of space. My VW GTI only gets about 22/28 and it's a small car. Then I compared my mileage with my coworker's Jeep that gets 15 in the city and I felt better.

jeep and dodge seems to have the rep of bad milage.

and breaking down

I got a 1987 Plymouth Sundance (a Chrysler) for my 16th birthday in 1991. That car's clutch failed for the first time in 1993 when the mileage was about 90k, so that's pretty good. We got rid of it in 1995 when the starter died and my dad didn't want to pay to have it fixed. The car was sold on and was still on the road as recently as 1999; it still had the 'honor roll student' bumper sticker I put on it in high school. There weren't too many pink Plymouths on the road with a Hillcrest High School bumper sticker on them, so I assumed that it was my old car.

Next I got a 1994 Plymouth Sundance (last year they were made) and while it started every single time I turned the key, it had problems with body integrity and with the paint job. It had an automatic transmission and I never had any tranny problems. The only "major" work I ever had done on it was to replace the timing belt, and that was scheduled maintenance anyway. I sold it in 1999. I did have to have frequent work done on the fan belts because they squeaked and the noise bothered me, but the car ran fine. The inside handle on the driver's side door came off in my hand and due to a manufacturing fault the door had to be disassembled and some components re-welded. I was charged $70 for that. The paint started to peel off the car in 1998 and by the time I got rid of it in 1999, about 15% of the paint was gone. Class actions against Chrysler were filed in several states and Chrysler offered to go halfsies with me on a new paint job, but I had to have it done at one of their dealerships. Their dealerships quoted me a price of $2800, and the car was barely worth the half I'd have to pay to have it re-painted so I turned them down. I got $900 for it when I traded it in; the car had originally cost $9,000 in 1995...so that's pretty sh!tty resale value right there. You should be able to get more for a 5 year-old sedan with 65,000 miles on it.

I found the Chryslers I owned to be very reliable, though the engines were noisy and the clutch on the '87 was touchy. They got pretty good gas mileage; the '87's mileage was better than the '94s because of the transmission, and I could squeeze about 28mpg out of it in the city, which is pretty good for an American car from the 1980s. The problem with Chryslers is that the low-end cars feel cheap and plastic-y, and the build quality (at least of the cars I owned) was not very good. I was not happy with the way Chrysler handled my car's paint problem; my uncle had the same problem with his Dodge Ram pickup truck, and he eventually traded it in and got a Chevrolet. He had been a Chrysler man all his life.