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How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

nytimes.com

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Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#21

Post by SilasX »

jondubois wrote: post #13
tptacek wrote: post #6

Earlier quoted context omitted.

This is addressed in the article: the oil industry in Venezuela is in disarray, so the country can't rely on its own supply. They have enormous reserves, but they can't reliably draw from it or refine it.

They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure. They have so many options to chose from to fix their economy. It seems like they don't have the will to fix anything. I wouldn't be surprised if there is some sort of corruption going on. The leaders of the country seem to be intentionally draining the money out of the co…

Except they've just created a long, immediate history of running the country like a basket case, so they have to pay an enormous premium for foreigners to come in and compensate them for the risk of reneging and re-nationalizing those leases.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#22

Post by drzaiusapelord »

k_sh wrote: post #2

> Oil accounts for half of the Venezuelan government’s revenues ...Who thought that was a good idea?

Socialists. I really was getting tired of hearing from the usual anti-US types on how wonderful Venezuela was back in the early 2000s and how Chavez stands up to the US and such, meanwhile it was led by what was pretty much a strongman with socialist policies and industry nationalization that quickly destroyed their wealthy oil-rich country. Now we're selling them oil so they don't starve in the streets. Curious to see how well Putin, the CCP, Assad, Khomeini, and other heroes of the anti-US left and their respective countries hold up in a decade or two.

Considering sites like HN and Reddit are full of the anti-US left, so its almost impossible to have this conversation, but I'm glad to know that Chavez is gone and things are probably going to get fixed there as Maduro loses influence. On top of Cuba slowly drifting away from autocratic authoritarian communism due to normalizing relations with the US. I hope the anti-US left can see some wisdom in getting communists and socialists out of power and putting in a democratic process thats open to all those who want to participate in free markets and protecting property rights, speech, and human rights in those countries. Downvote away.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#24

Post by PeterisP »

jondubois wrote: post #13
tptacek wrote: post #6

Earlier quoted context omitted.

This is addressed in the article: the oil industry in Venezuela is in disarray, so the country can't rely on its own supply. They have enormous reserves, but they can't reliably draw from it or refine it.

They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure. They have so many options to chose from to fix their economy. It seems like they don't have the will to fix anything. I wouldn't be surprised if there is some sort of corruption going on. The leaders of the country seem to be intentionally draining the money out of the co…

It's not that easy to motivate foreign companies to invest lots of money, equipment and effort (opportunity cost vs using the same things in other oil fields) after you've recently nationalized their previous investment.

Trust is slow to build and fast to lose, they're now facing direct consequences of their earlier actions, and a reversal would likely come only after a regime change.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#25

Post by riphay »

cheald wrote: post #10
conistonwater wrote: post #4

> Early this year, the United States began shipping more than 50,000 barrels a day of the light crude that Venezuela needs to prepare its own oil for export What does this mean? How does this work? Why do you need oil to make oil?

Venezuelan oil tends to be very heavy and needs to be mixed with light crude for refinement. It does have its own light reserves, but they've driven the oil industry into the ground and are unable to produce enough light crude to refine their heavy crude production.

Mostly this is a question of transportation. You can't put heavy crude in a pipeline or on a tanker until it's been diluted with lighter hydrocarbons like condensate.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#26

Post by matt_wulfeck »

Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. I understand many people will find a point of disagreement here.

This is especially true when corruption is rife. In countries with high corruption, it seems the very best thing to do is to limit as much as possible how much money flows from the top, which is another way of saying limit federal government spending.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#27

Post by tptacek »

drzaiusapelord wrote: post #22
k_sh wrote: post #2

> Oil accounts for half of the Venezuelan government’s revenues ...Who thought that was a good idea?

Socialists. I really was getting tired of hearing from the usual anti-US types on how wonderful Venezuela was back in the early 2000s and how Chavez stands up to the US and such, meanwhile it was led by what was pretty much a strongman with socialist policies and industry nationalization that quickly destroyed their wealthy oil-rich country. Now we're selling them oil so they don't starve in the streets. Curious to s…

Everyone sees their own ideological nemeses in the HN user base, which is both a sign that things are working well, and a reason for us all to avoid ideologically-charged political discussions as much as we can. I promise, the "anti-US left" sees HN as stuffed to the gills full of US apologists as well.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#28

Post by jondubois »

douche wrote: post #19
jondubois wrote: post #13

Earlier quoted context omitted.

They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure. They have so many options to chose from to fix their economy. It seems like they don't have the will to fix anything. I wouldn't be surprised if there is some sort of corruption going on. The leaders of the country seem to be intentionally draining the money out of the co…

Somehow I don't imagine Royal Dutch Shell will be that eager to dive in again, unless they've got some very strong assurances that the next government isn't going to just pull the rug out from under them again...

It seems like a change of leadership would be necessary to restore trust. When you consider this, the corruption actually makes sense.

The country's leaders probably know that it's just a matter of time before they are removed from power and are trying to make use that time they have left to enrich themselves personally.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#29

Post by binarray2000 »

Why can't they just ask other more friendly countries (Russia, Norway, maybe China) for the expertise in exchange for oil? Should be an easy solution, or am I missing something in my oversimplification?

(And, please, don't blame it on communism/socialism; people have interests and I believe so do people in Venezuela - including those working in the government.)

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#30

Post by [deleted] »

jondubois wrote: post #13
tptacek wrote: post #6

Earlier quoted context omitted.

This is addressed in the article: the oil industry in Venezuela is in disarray, so the country can't rely on its own supply. They have enormous reserves, but they can't reliably draw from it or refine it.

They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure. They have so many options to chose from to fix their economy. It seems like they don't have the will to fix anything. I wouldn't be surprised if there is some sort of corruption going on. The leaders of the country seem to be intentionally draining the money out of the co…

[deleted]
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