So, this morning I got word that Uncle Hugo, (Hugo Chavez, I mean) 'nationalized' (read: seized) the assets of a major US oil service and supply company, Tidewater Marine, down there on Lake Maracaibo, Venezuela's major oil transshipping point. This is relevant for several reasons:
1) Citgo, the US arm of PVDSA (Venezuela's national oil company), has been rather unpopular of late, which has affected revenues.
2) Citgo has divested themselves of several large refineries in the past two years in the US, including their newest, largest refining complex which contained the most efficient refining tower of its' kind capable of making liquid gold out of the shitty sour crude that Venezuela posesses in abundance. I suppose, in hindsight, that that was an obvious foreshadowing of some serious power plays going on.
3). PEMEX, Mexico's state-run oil monopoly, has nationalized US assets themselves, paving the road for this shit. Of course, PEMEX has been run into the ground since then, pretty much, so maybe Chavez has something in mind to prevent that. Doubtable, but the path between planning and execution is a long one.
4). This is not the first time in recent memory that Venezuela has done this. ExxonMobil is still trying to get something back for their multibillion-dollar infrastructure seized two years ago. I supose that Tidewater was hoping for the best, and unable to get out prior to today's events, or, more likely, something happened to 'La Mordita,' the greasing of the wheels, that I'm certain Tidewater has been paying in one form or another. Who can say?
Either way, it's a tough day for Venezuela- The falling price of crude has probably put a lot of pressure on Chavez, who has been throwing money into bullshit programs at home, in an effort to emulate Fidel Castro's investment in education and healthcare, which has been the only thing keeping Cuba on the map. With Chavez, of course, being a pale copy of Castro, this is unsurprising. His emplacement as a tin-pot dictator is certainly firm. We'll see. One thing's for sure, Venezuela's internal struggle to prevent Chavez from being declared emperor-for-life affects us a LOT more that most folks think.
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2 comments:
Interesting. There must be a merchant marine parrellel to the old geology canard as in" I majored in geology, and minored in coal, while explaining summer work.
I spent my time drinking beer with geologists while reading in international affairs.
Gotta say, you hit the nail on the head. Few people are paying attention to the southern american leftists or is that nationalists picking up some plums, while energy commodities are at a low value. You could become a visionary when the price of "black gold" goes back to its true valuation. Thanks for the clue. I'm thinking of taking my two cents out of the mongolian coal market and putting it down south in sour crude. ]
Just a bit satiratical there, I'm thinking of the crew lost on the Brazilian rig which foundered a couple of years ago. Doesn''t seem to make any sense to aggresively pursue stocks which are more or less valueless these days, but a few years ago, different story and a rig foundered.
If I had some more discretionary income, I'd invest in Petrobras, for sure. They're still finding oil at home, and now they're growing in the US gulf, as well, finding oil for us.
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