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The Biggest Idiot of Them All

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February 12, 2008 – Comments (10)

is Unkie Hugo.

He thinks he can win this thing? He needs big oil more than the world needs his crude. He's already squandered the capital he and his cronies have extorted from the oil biz, with the result that the industry there is becoming crippled, and the rest of his national infrastructure is crumbling. Inflation is rampant (like crime), there are food and fuel shortages on the ground, and now he wants to start a bigger war with the West?

I got news for Unkie Hugo (who makes even our housing bailout politicians look like models of propriety) -- we can survive an oil price spike just fine.

What Unkie Hugo -- who is already on the outs with a lot of his former constituency -- needs to ask himself is this: can he survive a world that isn't buying his oil? 

10 Comments – Post Your Own

#1) On February 12, 2008 at 9:30 PM, DemonDoug (81.27) wrote:

South America has a history of coups.  He wouldn't be the first, and certainly won't be the last.  Probably a matter of "when" not "if" at this point.

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#2) On February 12, 2008 at 10:19 PM, Capsperson wrote:

He thinks he is the Che Guevara of Venezuela, and we all know what happened to Che.

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#3) On February 12, 2008 at 11:05 PM, EScroogeJr (< 20) wrote:

It is a Venezuelan president defending the interests of US oil companies that would be an aberration. Our president is not beholden to economic interests of Irak, is he?

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#4) On February 13, 2008 at 12:57 AM, jegr5347 (< 20) wrote:

Don't believe the hype. He is a populist and needs to save face with his constituents after a devastating loss in December over a referendum that handed him more power. Chevron or someone else will pick up the slack and then resell to Exxon via backdoor. Venezuela's heavy crude can only be refined in US refineries.

That country runs on oil and nothing else. They have no domestic manufacturing of any kind and don't export anything.

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#5) On February 13, 2008 at 1:28 AM, EScroogeJr (< 20) wrote:

Indeed, I don't quite see the need for nationalization. Why nationalize Exxon's oil when you can simply impose a 99% profit tax on oil industry, and let these gringos continue to work for the benefit of the Venezuelan people?

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#6) On February 13, 2008 at 8:14 AM, AnomaLee (28.50) wrote:

"Indeed, I don't quite see the need for nationalization. Why nationalize Exxon's oil when you can simply impose a 99% profit tax on oil industry, and let these gringos continue to work for the benefit of the Venezuelan people?"

LOL - Ditto tho... 

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#7) On February 13, 2008 at 3:18 PM, saunafool (98.59) wrote:

Call it nationalization, or implement a 99% tax, either way you get the same result--the big companies pack up their bags and head to greener pastures.

Need someone to make a multi-billion dollar investment to advance the technology and build the infrastructure for your heavy Orinoco crude? You just told them they'd never make a dime from it.

Guess what, Hugo? Unlike Saudi Arabia, Venezuela hasn't developed an independent petroleum engineering education system and workforce. The majority of PDVSA's engineers were educated in the U.S., and Hugo purged them in a political move a few years ago.

The kicker of them all, the U.S. has the refineries to handle the heavy Venezuelan crude, which means he has to send the oil here. If he doesn't, we don't necessarily suffer. A refinery that can handle heavy, sour crude can be reconfigured rather easily to handle lighther, sweeter crude. Going from light, sweet to heavy, sour is the tough route. 

Yep, Hugo's gonna lose this round, but jegr5437 is right, it's not about winning, it's about the poor people in Venezuela thinking he is standing up against their enemies. ExxonMobil never did anything for Venezuela's poor, so Hugo can blame them for all the woes of the country. It's a pure political move, just like everything else that guy does while the once proud and skilled PDVSA crumbles. 

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#8) On February 13, 2008 at 7:17 PM, EScroogeJr (< 20) wrote:

What I'm saying is, he could have achieved the same result using legal means without exposing these $12 Bln to the uncertainty of litigation. But let's make it clear: the argument that what's bad for Exxon is bad for Venezuela does not hold water. If you let Exxon work in Venezuela in the way that Exxon's shareholders would like most, you're going to wind up with plundered oil reserves, felled trees and dead fish swimming down the Orinoco toward the ocean, chimney stacks sending plumes of sulphourous smoke into the atmosphere, and with the population in the same abject powerty as before.

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#9) On February 13, 2008 at 10:22 PM, TMFBent (99.81) wrote:

Please. You force Oil to work in Venezuela the way Hugo wants, and you get no investment. Oh, wait, that is what's happening.

Hugo will end up face down in a river if he continues this way, because he's already ripped off most of the cash-producers in his country, and it's not enough to keep the rabble happy. They won't fall for his faux nationalism when they're starving, and many, many are hungry now.

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#10) On February 14, 2008 at 12:05 AM, EScroogeJr (< 20) wrote:

From the World Factbook: 

Venezuela

Investment (gross fixed):
25.4% of GDP (2007 est.)

USA:

Investment (gross fixed):

15.6% of GDP (2007 est.)

:):):) 

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