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pettyfog · Feb 10, 2008

Angry at Exxon, Chavez threatens to cut US oil sales

Associated Press
CARACAS, Venezuela — President Hugo Chavez on Sunday threatened to cut off oil sales to the United States if Exxon Mobil Corp. wins court judgments to seize billions of dollars in Venezuelan assets.

"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said. "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."

Exxon Mobil has gone after the assets of state oil company Petroleos de Venezuela SA in U.S., British and Dutch courts as it challenges the nationalization of a multibillion dollar oil project by Chavez's government.

A British court has issued an injunction "freezing" as much as $12 billion in assets.

"I speak to the U.S. empire, because that's the master: continue and you will see that we won't sent one drop of oil to the empire of the United States," Chavez said during his weekly radio and television program, "Hello, President."

"The outlaws of Exxon Mobil will never again rob us," Chavez said, accusing the Irving, Texas-based oil company of acting in concert with Washington.
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Oo-o-o-oo-H! Are we shaking in our boots, friends and neighbors? Or are we feeling like we're channeling Dirty Harry? You know... "Do you feel lucky, punk? Do you? Go ahead, make my day!"

Although Venezuela still is a significant oil supplier to the U.S. its relative importance has been decreasing during the last 5 years, going from second to fourth place among U.S. import sources. This is due to the loss of production capacity of the Venezuelan oil industry, a decline brought about by the politicization of the state-owned petroleum company under Chavez. Not only has production capacity declined but also half of the Venezuelan oil exports to the U.S. can only be refined in the United States due to its physical properties. This means that Chavez cannot easily sell this oil to alternative clients such as China or India. For this to be possible these countries would have to build refineries capable of processing Venezuelan oil, something that would take at least three to four years to accomplish, even if they started today.

In parallel with this lack of flexibility Venezuela is facing a decline in its international monetary reserves since Chavez keeps raiding them. These monetary reserves only represent some six to seven months of imports at the current level since Venezuela is now importing close to $40 billion per year, mostly in food. Therefore, an interruption of oil income derived from the cut off of oil supplies to the United States would most probably cause the Chavez’s regime to collapse in less than a year as the result of internal protests, no outside intervention required.
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But read the rest.. if we give him time to set up other sales for that, he'll do it. that's why now is the time for Exxon to test him.

But maybe they wouldnt have to import all that food, either, if he wasnt 'planning' their economy.

How did Chavez get so smart?

Here's a hint!

Spencer · Feb 11, 2008

Article in the nyts this weekend about the tide within Venezula slowly turning on Chavez.

http://www.nytimes.com/2008/02/09/world ... f2&ei=5087

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pettyfog Well-Known Member

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