mailing list archives
Chavez offers long-term oil contracts at $50/bbl - and Exxon refuses.
From: David Farber <dave () farber net>
Date: Tue, 4 Apr 2006 20:29:33 -0400
Begin forwarded message:
From: Dewayne Hendricks <dewayne () warpspeed com>
Date: April 4, 2006 4:58:50 PM EDT
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] Chavez offers long-term oil contracts at $50/
bbl - and Exxon refuses.
Reply-To: dewayne () warpspeed com
[Note: This item comes from reader Randall. DLH]
From: Randall <rvh40 () insightbb com>
Date: April 4, 2006 1:26:23 PM PDT
To: Dave <dave () farber net>, Dewayne Hendricks <dewayne () warpspeed com>
Subject: Chavez offers long-term oil contracts at $50/bbl - and Exxon
Tuesday, April 04, 2006 at 3:53 PM EDT
Chávez seeks to peg oil at $50 a barrel
· Price could see Venezuela producing for 200 years
· Country's reserves may exceed Saudi Arabia's
Monday April 3, 2006
Venezuelan president Hugo Chávez is poised to launch a bid to transform
the global politics of oil by seeking a deal with consumer countries
which would lock in a price of $50 a barrel.
A long-term agreement at that price could allow Venezuela to count its
huge deposits of heavy crude as part of its official reserves, which
Caracas says would give it more oil than Saudi Arabia.
"We have the largest oil reserves in the world, we have oil for 200
years." Mr Chávez told the BBC's Newsnight programme in an interview to
be broadcast tonight. "$50 a barrel - that's a fair price, not a high
The price proposed by Mr Chávez is about $15 a barrel below the current
global level but a credible long-term agreement at about $50 a barrel
could have huge implications for Venezuela's standing in the
international oil community.
According to US sources, Venezuela holds 90% of the world's extra heavy
crude oil - deposits which have to be turned into synthetic light crude
before they can be refined and which only become economic to operate
with the oil price at about $40 a barrel. Newsnight cites a report from
the US Energy Information Administrator, Guy Caruso, suggesting
Venezuela could have more than a trillion barrels of reserves.
A $50-a-barrel lock-in would open the way for Venezuela, already the
world's fifth-largest oil exporter, to demand a huge increase in its
official oil reserves - allowing it to demand a big increase in its
production allowance within Opec.
Venezuela's oil minister Raphael Ramirez told Newsnight in a separate
interview that his country plans to ask Opec to formally recognise the
uprating of its reserves to 312bn barrels (compared to Saudi Arabia's
262bn) when Mr Chávez hosts a gathering of Opec delegates in Caracas
Venezuela's ambitious strategy to boost its standing in the global
pecking order of oil producers by increasing the extent of its
officially recognised reserves is likely to face opposition. Some
countries will oppose the idea of a fixed price for the global oil
market at well below existing levels. Others are unlikely to be happy
with any diminution of their influence over world oil prices in favour
Caracas's hopes for an increase in its standing would be a far cry from
the days when Mr Chávez came to power after years of quota-busting
during which Venezuela helped to keep oil prices down. "Seven years ago
Venezuela was a US oil colony," said Mr Chávez.
As he seeks to bolster his country's standing on the world stage, the
Venezuelan president has also introduced radical changes to the domestic
oil industry. Last Friday his government announced that 17 oil companies
had agreed to changes which will see 32 operating agreements become 30
joint ventures that will give the government greater say over the
country's oil industry.
The original deals were signed in the 1990s as part of a drive to
attract more investment into the country's oil industry. However Mr
Chávez said the deals gave foreign companies too much and the government
too little. Under the new arrangements state-run Petroleos de Venezuela
will hold 60% of the joint ventures. "Now we are associates and this
commits us to much more ... it's no longer a contract for doing a
service, it's a strategic alliance," Mr Chávez told the companies that
The new arrangements were not universally welcomed by the oil companies.
Exxon Mobil and the Italian energy company Eni have refused to sign up
to the new arrangements.
Mr Chávez, a former paratrooper who has survived several attempts to
oust him and who faces re-election in December, regards Venezuela's oil
revenues as crucial to his plans to fight poverty. Critics accuse him of
squandering the country's oil wealth on improvised social programmes.
The Venezuelan president used the Newsnight interview to attack the role
of the International Monetary Fund in Latin America, where it has a
reputation for pushing market-based reforms as the price of its help to
countries struggling with their finances.
The Chávez government has helped a number of countries, including buying
Argentinian and Ecuadorean bonds, with Mr Chávez arguing that he would
like to see the IMF replaced by an International Humanitarian Fund.
Hugo Chávez was born in 1954. The former paratroop colonel first came to
prominence after a failed coup in 1992, for which he was jailed for two
years. He was elected president of Venezuela in 1998, launching a social
programme known as Bolivarianism, after the revolutionary Simón Bolívar,
and reversing planned privatisations. In 2002 he survived a coup attempt
and, two years later, a bid to unseat him in a referendum. He has close
links with Cuba's Fidel Castro and has frequently clashed with the
Weblog at: <http://weblog.warpspeed.com>
You are subscribed as lists-ip () insecure org
To manage your subscription, go to
Archives at: http://www.interesting-people.org/archives/interesting-people/
- Chavez offers long-term oil contracts at $50/bbl - and Exxon refuses. David Farber (Apr 05)