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I recently read an article from www.nytimes.com/2004/07/24/business/worldbusiness/24venez.html the New York Times entitled, “Oil, Venezuela's Lifeblood, Is Now Its Social Currency, Too.” I am commenting it because I found it generally favorable to the Chavez administration and what it is doing for the country and, although it still has an American corporate spin to it, it also acknowledges that Chavez will most likely win the referendum.

I would like to take the time now to address the spin of the article for clarity's sake:

The article starts by saying “Although energy experts say production remains below prestrike levels the oil-and-gas monolith is, once again, one of the world's great producers of crude.”

What they don't say is who those energy experts are …are they the same energy experts that were fired from PDVSA because of their corruption?

The article continues “But while PDVSA's talk of foreign investment and ramped-up production is welcome in the boardrooms of the world's biggest oil companies, in recent months much of the new earnings have been siphoned from exploration and production projects that some energy analysts say Pdvsa needs to recover fully from the strike.”

Some energy analysts? Again who are they? I will bet they are the same crooks that were ousted.

Obviously these “ analysts “are not interested in Chavez's social programs to help the people of Venezuela. The article at least admits that Chavez will most likely win the referendum.

The article states that “The company that has emerged from the ashes of the strike that ended in February 2003 is nothing like the button-down, corporate-style company that in the 1990s was often the #1 provider of foreign oil to the United States.”

I hate to inform the Times but Venezuela is still the #1 provider of oil to the US. And of course the company is different. That's because they fired all the thieves.

The article goes on to say “ Gone is the by-the-book giant, which had US$42 billion in sales…”

What it doesn't say is that with the price of oil being so high these days the sales probably surpass $42 billion by now.

The article continues saying “…according to filings with the US Securities & Exchange Commission last October. Gone is the multinational whose managers once proudly compared PDVSA to Exxon Mobil.”

Right, who cares, Exxon doesn't funnel any of its money to social programs. They just spill oil in Alaska, it's a good thing the new Pdvsa isn't like them.

The article continues “Gone, too, are 18,000 experienced executives and managers who were fired for their role in the strike.”

All I can say is, thank God and good riddance. PDVSA doesn't need a bunch of crooks and chupones on its payroll.

The article continues with the American spin saying “The new PDVSA seems to be in no rush to pump more oil to ease the supply squeeze that helped contribute to a price of US$42 a barrel in early June and caused so much consternation for American energy officials.”

I hate to inform both the New York Times and American energy officials that PDVSA is not the US bitch anymore … “their role is not any more to service the US … their role now is to serve the Venezuelan people.” 

Bernard Mommer, an executive at PDVSA, puts it in perspective: “They better get used to it.”

Then they throw in a contradiction, the article continues “For now, PDVSA is awash in cash … its oil revenue in 2004 will top US$7 billion, according to an estimate by LatinSource, a network of economists based in New York.”

So they want to say they are not what they used to be … but they are awash in cash? What is wrong with this picture? A little sour grapes , maybe?

Then they go back to the 'some experts' routine: “Some oil experts warn that huge expenditures like these will permanently damage a company that needs to spend up to US$3 billion annually just to keep production stable.”

Some experts again, but they don't say who they are. I will bet that they are the same thieving experts that were fired. You will notice that later in the same article most experts disagree. So who are these some experts?

The article continues: “What they're doing is just maintaining output,” said Ramon Espinasa, a former chief economist at PDVSA who is now an oil consultant for the Inter-American Development Bank. “They stopped the fall, but there's no growth in production.”

And who were these “ some” experts? Why I was right! It was that thieving former employee Ramon Espinosa! What a surprise!

And what are many experts saying? The article continues: “Still, many oil analysts and executives of large oil companies doing business here are taking a wait-and-see attitude, saying that with the big influx of revenue, Mr. Chavez' government may be able to spend big and still run the company.”

Gee, what a surprise, they can spend big and still pay for the social programs … who would have thought it?

Here we have another expert, but obviously not of the some expert category. He seems to fall into the more experts group, and an American expert at that.

The article continues: “These things don't ever come easily, but the steps they've taken are generally correct,” said Peter Hill, chief executive of Harvest Natural Resources of Houston, a small oil concern that has invested US$1 billion here since 1992. “I believe in the concept of what they're trying to achieve. I think we can contribute to that.”

The condescension then starts to get thick as the article continues: “The private sector is literally lining up at the ministry's door,” said David Voght, managing director of IPD Latin America, an oil company consultancy in Caracas. “Now it's up to the government to effectively manage these offers.”

Effectively manage these offers? What are they monkeys? The US and the NY Times better get a clue … what it (the Venezuelan government) has to do is pick the best deal for the lowest price since they are lining up at the ministry's door.

Real hard, huh? Most businessmen would love to have that management problem.

The article then lets on to a little known fact, it continues” “The future lies in developing the oil deposits under the vast grasslands of north central Venezuela, the so-called Orinoco Belt, which oil executives believe may contain more oil than all of Saudi Arabia. In the mid-1990s, when Venezuela was opening up to foreign investment, companies like Exxon Mobil, ChevronTexaco, ConocoPhillips, Total of France and Statoil of Norway came to the Faja, as the belt is known in Spanish.”

I guess with more oil then Saudi Arabia that pretty much puts Chavez in the catbird's seat. He gets to call all the shots now. Boy, they must really hate that they can't exploit this oil with impunity anymore.

Then they try to make it look like the new price structure will discourage new companies from drilling but fail to point out that the new higher price for oil more then compensates for it.

Then comes the real crux of the matter, the article continues: “Though any new projects in the Faja will fall under a 2001 hydrocarbons law that raises royalty rates to at least 20% and, for the first time, makes PDVSA a majority partner, companies remain eager, hoping that they can negotiate lower royalty rates and features in the contracts that reduce PDVSA's role, industry representatives said.”

Wow! 20% as opposed to 1% and a major partner instead of the big American oil companies bitch. Now that's a switch… The Venezuelans weren't being too exploited by the previous management, were they? I Wonder how big the kickbacks were.

This part of the article really had me chuckling: “Even at companies like Total, that are moving toward a deal, executives describe tough negotiations that leave them wondering how committed PDVSA really is to expanding the role of private companies.”

It doesn't leave them wondering how committed they are. It just leaves them p***ed off that they can't get over like they used to and make the killing that they used to make.

Chavez holds all the cards and they know it … they know if they don't play, China probably will. Let them grumble. Who cares?

I love this one too: “Some oil executives and analysts say PDVSA has become a more secretive company, unwilling to release the same kind of financial and production information that it would readily provide in the past.”

That's right, guys. Information is power … didn't they teach these guys anything in business school? What a bunch of whiners!

Here we go again with the “ independent experts” .. I guess they are independent because they don't have jobs anymore most probably being of the some experts category, as the article continues: “Independent energy experts also discount assertions by company officials that PDVSA is fully recovered from the 2003 strike. Oil executives who work with PDVSA say that the previously nimble company can take three times as long as a private company to drill a well and that its managers, though capable, lack the knowledge of the fired executives.”

Must be the thieving, bribing, kickback knowledge they lack, who knows.

The article continues: “And they question PDVSA's claims that it is producing more than three million barrels of oil a day. Analysts relying on import-export data and public rig-count records say it is producing 2.5 million a day, or a little more, at most.”

Analysts? Again, what analysts?

Of course, there seems to be a bit of a contradiction in the next sentence where it states: “Coming back after the strike to reach 2.5 to 2.7 million barrels is pretty heroic,” said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation, an industry-supported analysis group in New York. “They should get credit for that, but we do not believe their numbers.”

What? 2.7 million barrels? Could they be guessing? Is that why they don't believe the numbers? Obviously, they have no hard facts to estimate for certain, so they make it up. God forbid that they would have to admit that what Chavez is doing is working … then they couldn't return to 'business as usual.'

The article then continues with more condescension, “Mr. Chavez' public pronouncements have done little to assuage industry concerns. He has railed against the Bush administration, accusing it of coveting Venezuela's resources … and in March he even threatened to withhold oil if the Bush administration tried an invasion.”

Why should he? He should be Haliburtons bitch, maybe. What Bush did in Iraq was criminal. Why should Chavez act in any other way?

Then the article finally admits the real truth: “Analysts said that with Venezuelan oil providing billions more dollars than expected, Mr. Chavez probably feels he has the freedom to move slowly on signing contracts while focusing instead on social spending.”

The truth is he doesn't just feel that, he can. What and he can do is hold out for a better deal, as he should. Let them grovel some more for a change.

The funniest line was saved for the end, the article ends with: “Right now, PDVSA is not a mercantile entity,” said Antonio Szabo, a former executive at PDVSA who left long before Mr. Chavez came to power, and who is now chief executive of Stone Bond Technologies, a Houston software and energy consulting firm. “Right now, it's an instrument of the Venezuelan government.”

Now that's funny. Mercantile it is. What it isn't is an instrument of American hegemony.

Venezuela is not AmeriKas bitch anymore. Get used to it.

Joseph Pena: jpena16@comcast.net

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