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And Venezuela's solution to this?
Venezuela, Argentina to trade food, oil
Venezuela and Argentina have reached an agreement to exchange food for oil, it was reported Wednesday.
Under the agreement, Argentina will supply 1,000 tons of beef monthly and in exchange Venezuela will provide all the crude needed to ensure Argentina's "human and industrial development," Mercopress reported.
Venezuelan President Hugo Chavez said Argentine needs "no longer to worry about the energy issue." Similarly, he said, "the Venezuelan families are grateful to Argentina for its efforts in making everyday life easier."
I thought this was coming. It's not a good time to be both a big net food & energy importer.
Oh good - that makes me feel much better!
WT, this is not a new ploy for Chevez. He has said for several years that he wants 'fair trade' not 'free trade'...This statement is directed at the IMF and World Bank. His aim is to replace these organizations in SA and the islands. Everyone in SA is aware of the history of the US on their continent and Chevez is making an attempt to end US envolvement there. If one is to believe 1/2 of what is written in 'I Was An Economic Hit Man' it is easy to see why...but, that book aside, there is ample evidence of very bad conduct on the part of the US in SA for a very long time.
WT, this is not a new ploy for Chevez. He has said for several years that he wants 'fair trade' not 'free trade'...This statement is directed at the IMF and World Bank. His aim is to replace these organizations in SA and the islands. Everyone in SA is aware of the history of the US on their continent and Chevez is making an attempt to end US envolvement there.
If you stood up at the UN with all the cameras on you live and you told the whole spanish speaking world(and every other language) to go out and buy this book, Noam Chomsky’s “Hegemony or Survival,” a critique of American foreign policy
I'd say the secret is out, and the curtain has been raised for many.
It sounds like Senor Chavez is setting up his own little bartering system. Yet another way to circumvent using the U$D during oil transactions.
I agree with you and Westexas--the bartering will turn out to be the start of a trend.
From the start I had a gut feel that this pissing contest between Exxon Mobil and Venezuela would develop into something far beyond a mere dispute over money.
For Venezuela it appears to have become a matter on national honor. And what worries me even more, is that Venezuela appears to have a great deal of sympathy among those who like to see Uncle Sam's beard get tweaked.
So it would appear from OPEC's comment that it might support Venezuela.
I can't imagine that NOC's would take kindly to the idea of behavior like Exxon's.
On the contrary, I think they would be far more pissed at Venezuela than Exxon. Virtually all NOCs use foreign contractors. When Venezuela kicked Exxon out, they offered them pennies on the dollar for all they had invested in Venezuela. Imagine the president this sets. NOCs need foreign contractors and the behavior of Venezuela will make it more expensive to hire foreign contractors if they think there is a chance of being kicked out and leaving their investment behind.
Foreign investors will now demand a higher return because of Venezuela's behavior. They must now face the prospect that it could happen again in other countries. Other NOCs cannot possibly be pleased at this prospect.
I am absolutely astonished that so many people on this list think Exxon is the villain in this case. No, Exxon invested billions in Venezuela and when most projects were up and running they unceremoniously kicked them out and offered them a pittance for their investment. And that kind of behavior simply cannot be accepted by other NOC or those who are contemplating further investment in those nations.
Ron Patterson
Ron: Reality check- the country of Iraq was invaded, destroyed and not one penny of the oil revenue derived has been spent to rebuild the destroyed country. If it wasn't done to specifically benefit XOM they are certainly on the "home team" (unlike virtually all Americans not to mention the godforsaken Iraqis). Nothing against XOM, but when you have people killed for money sometimes people will consider you to be a "villain".
Bryan, we are talking apples and oranges here. I know Iraq invaded Kuwait, then Kuwait pleaded for help from the US and got it. Then Bush 1 left and things were back to normal. Then Baby Bush tried to be a hero. I do not defent Bush 2 in any shape or form. I am backing the Democratic cantidate because McCain is just another Bush and wishes to continue the Bush policy.
But that has not one frigging thing to do with the Venezuela-Exxon debate. Please stick to the subject and if it is apples don't try to make it oranges.
Ron Patterson
Ron: I disagree. You say (in the Venezeula situation) that there should be a world of rules and they are breaking the rules, which is a bad thing. The same company (XOM) that is supposedly getting the short end of the stick here (unfairly according to you) stands to benefit from the use of the schmuck taxpayer's money not to mention the loss of life in the Iraq situation. According to you, this is the proper working of the "free market". Whatever.
uh huh,
Ron, the argument BrianT makes IS about apples and oranges.. but they are all Oily, Nationalised Apples and Oranges. Have a seance, ask Mossadegh about his Oily, Nationalized Oranges.
Bob
Jokuhl, it would be helpful if you would just make a point instead of just expressing silly hyperbole. I am not a psychic and do not hold séances therefore I cannot ask Mossadegh anything. You obviously know that therefore you put your post out of reach of normal refutation. That is a cheap rhetorical trick. I am unimpressed with such silly tricks however others may have a different opinion of your verbiage. However is does give me a chuckle. Being a student of silly rhetorical tricks and always enjoy a new one. Thanks for that anyway.
Ron Patterson
3 Vulnerable Regimes, Nationalizing or Threatening to Nationalize their Oil Supplies.
2 Down,
1 To go (OK, a lot more than 1 to go, but they're working on them too, I'm sure!)
I can't believe that my point was all that obscure, though I realize my writing can be far from Literal. You seem to have a way of not even trying to get the point being made..
I don't think 'Hyperbole' fits, but 'Rhetorical Device' would be fair enough.
Bob Fiske
ps, I held a Seance, and 'Mossadeq' referred me to this Wikipedia page.. let me know if it's way off in it's conclusions..
"The Dulles brothers had worked for Sullivan and Cromwell, a prominent law firm that represented Standard Oil of New Jersey. Standard Oil had wanted to gain oil interests in Iran for many years; but the AIOC had a monopoly on the region. The Dulles brothers saw a chance to give Standard Oil the ability to set up operations in the region, when the British asked about a coup. The British, no longer the dominant power, knew they could not remove Mosaddeq without the US, which meant that the US would be entitled to a portion of the Iranian Oil, which they were okay with, because 60% is better than nothing. After the Coup, 40% of Iranian oil was owned by US oil companies."
http://en.wikipedia.org/wiki/Operation_Ajax
related NYT article:
http://www.nytimes.com/library/world/mideast/041600iran-cia-index.html
The NOCs have zero need for foreign investors or contractors. Zero. Nada. They have boodles of money, and can now call the shots. Smart IOC's like Total are adapting. Stupid IOC's, like Exxon, are pulling plays like this. They are dooming themselves.
Wrong, wrong, you could not possibly be more wrong! I was a contractor in Saudi for two years and an Aramco employee for three more years. Aramco is totally dependent on foreign employees and contractors. Many of my friends were former contractors in Iran or Kuwait. Every oil company in the Middle East is totally dependent on foreign contractors.
Schlumberger, Halliburton, Brown and Root and dozens of other contractors are in the Middle East because they are needed there to drill and service oil wells. I was with Dravo Utilities, then a contractor to ARAMCO, for two years in Saudi. We built the first Gazlan power plant there. A second has been built by another contractor since I left.
To say that NCOs have no need for foreign investors or contractors shows an unbelievable amount of naiveté as well as a total lack of knowledge as to how NCOs actually operate. Do you actually believe that ARAMCO could build gosps, power plants, refineries, petrochemical plants, install water seperation equipment and drill and then pour horizontal MRC wells without foreign help? Goodness man, try to study up on what is really going on over there.
If they did not truly need those contractors they would not be there. That is just plain common sense.
And it must be noted that when the four oil companies that built ARAMCO, (The Arabian American Oil Company) left Saudi in the late 70s and early 80s, they were adiquately compensated for their investment. Saudi did the honorable thing and paid those that had built the company a just sum for their labors and investment. Venezuela did not. That is the point of contention.
Ron Patterson
Agreed, But this battle is also causing the price of Oil to rise. Exxon profits from higher oil prices. If VZ does shut off the taps to the US, oil prices will head much higher. Why I understand Exxons desire to get back its investment, this battle will result in further geopolitical deteriation with Oil exporters.
As a taxpayer and energy consumer it probably would had made better sense for the Us gov't to re-imburse Exxon for its losses. Now all americans will suffer as the price of oil rises again. Exxon may win the battle, but everyone else stands to lose.
TechGuy, sorry but you are a bit off on this one. Chavez is not really as dumb as he lets on to be. He clearly realizes that oil is a fungible commodity. And his oil is heavy and sour, meaning that almost any oil is better than his. His oil can be replaced with any oil from anywhere in the world. If he shuts off oil sales to the US then those that he does sell his oil to will just buy less oil from someone else. That oil will go to the US.
Chavez can only hurt the US by not selling oil at all. That would drive prices higher and wreck his budget in the process. But that in turn may help the entire world by pushing oil prices to a more reasonable level, pushing out the date when the oil supply will sharply decline.
Ron Patterson
If Chavez still owns the CITGO refinery, he could sell his gasoline from that refinery to Mexico, which, as noted above, is considering sending it's oil to India for refining. Chavez is not saying he would not MOVE his oil to the U.S. only that he saying he won't SELL his oil to EXXON or the U.S...
E. Swanson
Third option, PVDSA "creates" new demand. Long term (several years) deal with China (and India ?) to fill their SPRs at much faster rates than they are currently being filled.
India has two new (last couple of years) heavy oil refineries. Eash was built in just one year. India, China co-operation to build a Venezuelan oil "upgrader"for long term storage ? Remove metals and sulfur, take the asphalt and bunker fractions and crack them while adding some hydrogen and end up with a few different syncrudes that can fit various refineries. Perhaps sell some of the asphalt locally instead of storing it.
Three or four years of 250,000 b/day (first deliveries 1/1/2009 ?) specifically for the SPRs (much faster fill than currently) would have an impact.
And after the SPR contract was over, the tankers could still keep coming.
Alan