Poor Hugo

The price of oil has dropped way below what Venezuela needs to support its promise to pay all friends of Hugo a zillion quadrillion pesos each, so what can Hugo do? Well, how about pumping more oil? Yeah, that’s the ticket! There are a couple of problems with this, even overlooking his previous promise to punish us by pumping less. First, he’s fired everyone who knew anything about producing oil and replaced them with party hacks so oil production is plummeting, not increasing. Second, he’s nationalized and confiscated the property of oil companies foolish enough to have remained after his ascension to power, so there’s no one around to increase production. Third, his latest plan calls for new oil companies to come in where others were expropriated and supply $20 billion because Hugo doesn’t have it. Assuming there is someone stupid enough to join Chavez in his delusions (what’s China doing with its cash these days?) they’ll deserve everything they lose when Chavez pulls the football away once again.

Personally, I doubt anyone is that stupid and I think Chavez is going down hard. Too bad he’ll bring Venezuela down with him but they voted him in, so that’s tough. We all get the government we deserve, which is what has me so worried these days.

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3 responses to “Poor Hugo

  1. Sambone

    Chris,
    Look to Mexico also. Most of the government revenues come from oil. Cantrell is Mexico’s biggest field in which production continues to fall. I agree with you about Chavez. When all is done he will be another Mussolini hanging from a light pole.

  2. Krazy Kat

    I am no expert but I think I recall reading that Venezuelan crude is quite sour and is difficult to refine. I also think it has to be shipped to the USA to be put through sophisticated crackers.

    So, if there are limited markets for the sour stuff, that would also make it difficult for Hugo to maximize revs even if he could squeeze out more production.

    • christopherfountain

      You’re right, Krazy, and that’s what made Chavez’s threats to cut us off so laughable. The only (most?) refineries in the world designed to handle heavy Venezuelan crude are here (in Louisiana, I believe).I don’t know what Cuba does with the crap he sends them – maybe he refines it here and ships it there? But anyway, he ain’t ready to go it alone and with luck, never will be. Bring on the lamp post, as one reader has suggested.