Hugo Chavez Seizes Foreign Oil Projects

Technorati Tags: Hugo Chavez, Venezuela, oil companies

What Chavez is doing in Venezuela right now (nationalizing the foreign oil industry) is exactly what the Bush administration wants and is determined to avoid in Iraq. That is their real goal in Iraq, and has been all along:

The troops may not know what victory will look like, but I have an idea the administration knows what they are after and what it will look like. It will be an Iraq controlled by American corporations and American oil companies -- this was planned long before the invasion, as has been widely reported. The “new Iraq” will be run by a nominal government of mostly exiles, largely unknown to the average citizen. This government will always have to be acceptable to the U.S. occupation and will be kept out of the orbit of Russia and China and other would-be competitors for oil resources. For the average Iraqi a victory might be ridding the country of invaders--most notably, us.

When the Republicans say “we dare not lose,” it is losing control of Middle East oil, and losing face, that worries them. They dare not admit that this invasion, the principle of pre-emption, and the unraveling of our democratic way of life and Constitutional safeguards, are all bad ideas. In short, the empire will have shown its soft underbelly. The people have no stomach for empire and occupation, and so indicated by their vote last November. Historically, the people have to be dragged from one tragedy to the next by governments that confuse defense with offense, and view the entire world as ripe for America’s neo-conservative dream of manifest destiny.

Reading the document “Project for a New American Century,” authored by Doug Feith, Richard Perle, Paul Wolfowitz and other war hawks, leaves one with no doubt that Iraq is but another domino in an imperialistic venture--hatched long ago and recently updated and modernized to recognize the dominance of multi-national corporations.

The right-wing blogger reaction to Chavez's notice to Exxon/Mobil, BP, Chevron, et al., that they cannot continue to use Venezuela's natural resources to enrich themselves is absolutely surreal:

Venezuelan president-cum-dictator Hugo Chavez continued his confiscation of private property and foreign investment yesterday by seizing oil projects and assimilating them into the state-owned petroleum organization. Delivering on his pledge to create a socialist state along the same lines as Fidel Castro's Cuba, Chavez told foreign-owned firms that they now had to accept a minority stake in their own properties. ...
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Interestingly and not surprisingly, the Venezuelan strongman didn't mention how he planned to compensate these companies for 60% shares of their projects. Instead, he told them that he didn't want them to leave, and take all of their expertise and technology with them. Chavez wants them to accept the fact that they would do all the work while he gets most of the profits.

These projects were the only privately-financed oil production facilities in Venezuela, and their worth is estimated at $17 billion. Will Chavez send them a check for the $10.5 billion he owes for his share of their operations? Don't bet on it. Chavez has offered compensation for other business assets that he has nationalized, but he has tried nothing on this scale so far.

Chavez's diktat will take legal effect in four months, although Chavez says he'll seize the projects by May 1. The companies have that long to negotiate terms with Chavez, who has an army to occupy the oil fields, making negotiations somewhat one-sided. The oil producers will likely try to strike a bargain with Chavez, but it makes little sense to do so. They will only be delaying the inevitable; Chavez will eventually steal it all from them. They should dismantle their operations and leave forthwith, taking the losses now and leaving Chavez to explain why the workers have lost their jobs as well as the expertise necessary to produce their primary export.

Great jumping greasemonkeys. Anyone would think that Chavez had invaded Texas and held up all the corporate CEOs at gunpoint. Can we take a step back and remember where these multinationals have planted their oil projects? In whose country?

Gaius heads his post at Blue Crab Boulevard "Venezuela Continues Descent":

(T)Hugo Chavez has now taken the easily foreseen step of seizing foreign owned oil projects in Venezuela. (Raise your hand if you didn't see this coming, then slap yourself). He plans on "occupying" the oil fields as soon as possible.
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Here's a hint: (T)Hugo won't pay for what he is stealing. If anything at all, the companies will be offered pennies on the dollar with a take it or leave it message. Exactly what he already did with the electric utility, in fact. Foreign investment will dry up completely in Venezuela now. Chavez will preside over collapsing infrastructure and nose-diving production.

First off, the Venezuelan government has already said that private and foreign-owned industries that are being nationalized will be compensated. So there is no reason to think, or to say, that they won't be, other than pure ideological hatred. Second, whether or not Exxon/Mobil and other huge multinational oil corporations are compensated for nationalization, Chavez is not "stealing" from them. If anything, the oil giants have been stealing from Venezuela, for years and years and years. One of Gaius's readers said it better than I could:

Stealing? Did you see the terms under which the oil companies had access to the fields? They were insanely slanted to the corporations! The people who negotiated them should be declared enemies of Venezuela. They gave the country’s resources away.

How do you steal something stolen from you? The Venezuelans are wise to re-elect Chavez for now…

These oil companies really do believe that the world's oil fields are their private playgrounds, and that the people living in those countries have nothing to say at all about who profits from their natural resources. It's amazing how the concept of nationalism and sovereignty and pride in country doesn't apply to countries that are sitting on tons of fossil fuel. Those countries should be willing to give it all to Lee Raymond or David O'Reilly, or be strongly urged to do so by the U.S. military.

But we won't be doing that this time:

If you are looking for a silver lining in the dark clouds of Bush's foreign policy, I think I may have found one. In the past we would now be at war with Venezuela.

And here's why.