A Reuters story published on April 15 hailed Venezuelan Oil Minister Rafael Ramirez’s visit to the US as a milestone, noting that the “overture” of his visit marked the country’s first talks in Washington in six years. The visit was one in a string of political calls around the world made by Ramirez on behalf of his government. He had already visited Russia, China, Japan, and several countries in Europe. Ramirez’s objective was to encourage these countries to invest in Venezuela’s oil fields. The country’s role as an exporter has global impact. It is the world’s eighth largest oil exporter and the fourth biggest foreign oil supplier to the US market. According to Reuters editors Timothy Gardner and Tom Doggett, Venezuela has an estimated 99.4 Bbbl of proved oil reserves, with last year’s production averaging 2.2 MMb/d. This figure is impressive, but it reflects a drop of 190,000 b/d from 2008. The real issue (and the reason for the “overture”) is that Venezuela lacks the technology to produce its heavy oil. Somehow, this fact wasn’t weighed several years ago when Venezuela forced foreign companies to renegotiate their oil development contracts, which dramatically reducing profits. Many US companies bailed, deciding to sell their holdings rather than accept new unfavorable terms. Exxon Mobil and ConocoPhillips pulled out of Venezuela in 2007 after being pushed out of multibillion-dollar Orinoco projects. Interestingly, according to the Reuters story, Ramirez said Venezuela-US relations had been hurt by the Bush administration, which he said had been "hostile" to his country. Ramirez reportedly explained, “There’s no reason whatsoever for this relationship to have been halted.” This logic reminds me of George Orwell’s book 1984, in which the main character, Winston Smith, works for the Ministry of Truth, where he spends all day re-writing historical events to match the current government message. I suppose the withdrawal of US-based oil companies had nothing to do with the fact that Venezuela changed the rules and implemented extortionate taxes. Gardner and Doggett reported the very interesting view of Patrick Esteruelas, Latin America analyst at Eurasia Group in New York, who said he didn’t think Ramirez's comments about US firms were significant because Venezuela has not discriminated against companies from specific countries. Instead, Esteruelas said, “It has just demanded an equally aggressive share of the (oilfield) rent from all willing investors,” noting that very few US companies have shown much willingness to accept the new terms. So the facts that the national oil company in Venezuela reclaimed acreage and unceremoniously hiked taxes are not to be considered as a partial cause for the present lack of foreign investors in Venezuela. Interesting….. And one wonders just how convincing Ramirez can be in inviting foreigners back into Venezuela – particularly when one of those on the guest list is the US – particularly while President Hugo Chavez continues to lambaste the US government at every turn. According to a Reuters story, in mid-January, Chavez accused the US of “occupying” Haiti following the devastating earthquake and aftershocks earlier in the year. And Press TV reported a few days later that Chavez had accused the US of actually causing the destruction in Haiti by testing what he called a “tectonic weapon” to induce the catastrophic quake. It doesn’t really appear that much has changed. Ramirez might be scurrying around hat in hand begging for investors, but back home, Chavez is singing the same old anti-American song.
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