With the lightning speed that only a would-be dictator can muster, Hugo Chavez grabbed power in Venezuela last week. Greedily grabbing all the levers of authority, Chavez made the next move in his promise to deliver utopia to his people. And when all of the votes had been counted, Chavez promptly took his place in the string of history's other leaders who also boldly proclaimed, "I am the state."
In the meantime, however, it is his country's position as the number-four supplier of imported oil to the United States that promises to deliver his socialist misery to our doors.
On Thursday, the country announced that by May 1 it would nationalize the remaining petroleum resource projects still being held in partnerships with some of the world's biggest oil companies. Affected by the decree are firms such as Chevron, Exxon Mobil, Conoco Phillips, Statoil and BP, which may now lose an estimated $8 billion in value to the state.
At the center of this money grab are the heavy oil fields in what is known as the Orinoco Belt.
These fields, which cut a wide swath across the country, produce not the preferred light sweet crude but a thick, heavy sludge that was once thought to be worthless. But like the tar sands found in Canada, it can be processed into oil. In fact, these fields currently add about 600,000 barrels a day to the country's output-all of which would have been impossible without the efforts and investments made by Big Oil.
But it's not so much their existence that has made them desirable to the dictator as it is their size. Recent estimates of their capacity have claimed that this region contains up to 235 billion barrels of recoverable oil, an amount that would rival the reserves of Saudi Arabia.
Given the overall dollar value that these fields may ultimately hold, it's easy to see why Chavez is so eager to get his hands on them.
This is especially true since the country's other fields, which the government has already grabbed, are now in decline. Oil production in those fields has fallen to 2.2 million barrels a day from peak production in 1997 of 3.5 million barrels a day.
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Those declining figures make the rush to grab the Orinoco Belt all the more urgent. In fact, since the country is hoping to push its oil production to 5.8 million barrels by 2012, it's obvious that all of Chavez's socialists plans are joined at the hip to the sludge found there.
With that, the stakes are high for everyone involved. And while negotiations with the big multinationals in regard to the fields are ongoing, it is unclear whether they can have their arms twisted into playing ball with Chavez.
The government has already raised taxes on the oil currently produced there. Additionally, its move to force the multinationals into minority positions is being hampered by the decision to cut production at these fields by some 30% to comply with the OPEC edict reducing overall supplies.
It is under these circumstances that battle lines have been drawn and the game of chicken has begun.
At a new conference on Thursday, Chavez set the deadline. He told reporters, "I have given instructions that on May 1-May 1-all fields of the Orinoco Belt should wake up under our control."
But because these maneuverings by Chavez may ultimately give him power and influence in the energy world on par with that of Russia and the Middle East, it is a game that will be closely watched by the Bush administration.
And while they have remained mostly mum on the subject, the U.S. Energy Department did comment on Thursday that Chavez's actions were a "disturbing trend" away from free market principles.
Department spokesman Craig Stevens said, "These actions will considerably affect, to the detriment of the Venezuelan people, the long-term development of that country's resources and ultimately their economic growth."
But these free market sentiments undoubtedly fell upon deaf ears. And given the history of such tyrants, Chavez likely has more pain in store for both his people and the United States. Because the truth is that the last thing we needed was another oil rich state with ambitions to weaken us.
The Venezuelan people aren't the only ones that have lost out with this power grab-we too may wake up one morning and regret the events of the past week.
Wishing you happiness, health, and wealth,
Steve Christ, Editor
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"Greedily grabbing all the levers of authority"
Well, he is the damn president elected in a landslide. "Would be dictator" "'I am the State'" - must've missed that one but what's one more lie in so many?
"deliver his socialist misery to our doors."
"Affected by the decree are firms such as Chevron, Exxon Mobil, Conoco Phillips, Statoil and BP, which may now lose an estimated $8 billion in value to the state."
Gasp, especially cruel because we know these fine companies haven't screwed Venezuela out of a dime over all these years.
Your entire article castigates Chavez because he cares more about Venezuela than our oil problems.It'd be hilarious if it wasn't for the fact so many others in the Bush aristocracy think the exact same thing. If youd actually read the things he's done for the poor in Venezuela you'd realize none feel they've lost out by Chavez's actions. And yes all fo our hearts go out to poor Big Oil and their investments, and their pathetic billions a quarter in profits.
It's always about us, isn't it? This country has used Latin American countries as a servant class for almost 2oo years. A man comes along who says enough is enough, and all we hear is outrage because our oil addiction is threatened. If a country goes to war with one of the largest oil producers in the world tells its public to keep acting like they've always acted - drive your gas guzzlers, take road trips whenever you want, don't conserve, use use use - I'd say it deserves what it gets. The days of us calling the shots in other countries so that we are always benefited is coming to an end. Hopefully, Mr. Chavez will make that end come about sooner so this country can start acting like it's just one country in the world, not the ruler of the world. Maybe then we'll learn we need to conserve and work at maintaining a supply of energy, not just keep holding up oil rich naitons that can't fight back and make off with theirs.