South American Tensions

Chrom

New Member
Regarding oil, yes emerging countries' needs have pushed prices up. However most of the developed world is on the verge of a recession with industrial production going down. In such a situation sky high oil prices can only be justified by preceived geopolitical risks AND difficulty of getting supplies because state-controlled companies such as PDVSA are starved of funds and competent personnel. Since Chavez took power Venezuela has lost over 1 million barrels of oil (annual) of capacity. This is about 30% down.

cheers
You are wrong. The demand for oil still rising - everywhere! Including developed countries. But even in case of oil need decline in developed countries - the overall world's demand would still rise, and so are prices. This is absolutely unavoidable and expected process.

The roof for oil prices is expected to be in the about 100$-120$ area - not including $$ inflation which ofc can put $$ oil prices even higher. This 100-120$$ area is valid because at that point other alternatives are viable - i.e. wind, solar, etc energy. Also some other, more expensive oil drilling methods become viable at that point.

Oil prices will not fall lower than 100$$ no matter what - demand is already higher than offering. And demand is rising. Offering - not.
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
You are wrong. The demand for oil still rising -

I think you may both be talking at cross purposes.

The reality is that Venzuelas oil output is down due to inefficiencies and maint problems. This has been directly triggered by Chavez nationalising the facilities and pulling all revenue out for national capital expenditure. The refineries and facilities are subsequently degrading rapidly.

The brutal reality (and this is will known within OPEC as well the PChem industry in general) is that Venzuela is rapidly approaching an output/maint tipping point.

When it hits this tipping point of output to maint degradation convergence - then his government will then be in trouble from within.

Chavez has neither the will or comprehension to understand that he is about to turn a resource wealthy country into a production backwater.
 

Generalissimo

New Member
  • Thread Starter Thread Starter
  • #104
Colombia: 2nd rebel leader killed By VIVIAN SEQUERA, Associated Press Writer
Fri Mar 7, 8:22 PM ET

BOGOTA, Colombia - A top rebel leader was killed by his own chief of security, who gave Colombian troops the leader's severed hand as proof, the defense minister said Friday.

Ivan Rios was the second top rebel killed in a week, a major setback for the Revolutionary Armed Forces of Colombia, the country's largest rebel force.

No top Colombian rebel leader had ever been slain until Raul Reyes was killed Saturday in a cross-border raid by Colombian troops into Ecuador that set off an international diplomatic crisis.

"The FARC has suffered a new, major blow," Defense Minister Juan Manuel Santos told reporters, calling Rios' death "yet another demonstration that the FARC is falling apart."

He said troops launched an operation designed to capture Rios on Feb. 17 after receiving tips that he was in a mountainous area straddling the western Colombian provinces of Caldas and Antioquia, and engaged the guerrillas' outer security ring seven times.

Thursday night, he said, a guerrilla known as Rojas came to the troops with Rios' severed right hand, laptop computer and ID, saying he had killed his boss three days earlier. Rojas handed himself over to the soldiers.

It was unclear what motivated the killing, but Santos said it was to "relieve the military pressure" because the rebels were "surrounded, without supplies and without communication."

The U.S. State Department has a bounty of $5 million for Rios' capture, although the agency's spokesman, Kurtis Cooper, had no comment on whether the reward would be paid out in this case.

Santos said Colombia waited to make the announcement until it had confirmed Rios' identity, which it did Friday.

The military said it was transporting Rios' body to an army base in the western city of Manizales.

Rios, whose real name has been given as Jose Juvenal Velandia and Manuel Jesus Munoz, faced U.S. federal charges of drug smuggling, and was on a U.S. Treasury Department list of terrorists and drug traffickers.

The 46-year-old Rios became known across Colombia as one of the rebels' main negotiators in failed peace talks that ended in 2002. Unlike the FARC's mostly peasant leadership, he was a former university student who engaged journalists and foreign envoys in political and economic discussions.

"He was the youngest member of the secretariat. He was very important to the rebels," said Alfredo Rangel of the Bogota-based think tank Security and Democracy. "This shows the army is capable of taking down the rebels' most important pillars and that any of the leaders can fall at any time."

In a 1999 interview with The Associated Press, Rios said he joined the insurgency as a student in Medellin to avoid being killed by right-wing death squads that had attacked other student activists.

He commanded the FARC's central bloc, which operates throughout Colombia's northwestern coffee region. Security forces say he frequently accompanied the FARC's senior leader, Manuel "Sureshot" Marulanda, in recent years.
It seems Mr. Rios's security chief decided to take advantage of this situation and cash in on the $5 million bounty on his bosses head. This just shows how FARC is really a cash driven organization and doesn't really care about "liberating the rural peasants" or anything. Its about money. When drugs don't pay well enough, betraying your boss is the way to go.

FARC has taken quite a few hits in the last few weeks; it loses Raul Reyes, it has its ties with Chavez exposed, it loses its deal to buy MANPADs when that Russian arms dealer was captured in Thailand and it loses Ivan Rios. Looks like an organization in trouble to me. Especially when you take the fact that before a few weeks ago no member of the FARC Secritariat had ever been captured or killed in about 40 years of war. Then you get two down in about two weeks. FARC is probably riddled with informants and internal rivalries based on the fact that the intel for the Reyes raid in Ecuador was from an informant, and then you have this betrayl.

As FARC weakens, it will hide out more and more in Venezuela and Ecuador. So this could increase tensions.
 

Stryker001

Banned Member
That is not what CNN news has reported, the missles were in fact going to the FARC. Do you honestly thing that Chavez wants to see the U.S in a all out war in South America, that would be total suicide for him, his very own military would topple him fore even suggesting it.
Government agents posing as reps of FARC, it a well known fact Hamas are seeking surface to air capabilities on the international illicit arms market.


The US would have to send some support to their Colombian allies. Its over for the time being, they all kissed and made up.
 

Chrom

New Member
I think you may both be talking at cross purposes.

The reality is that Venzuelas oil output is down due to inefficiencies and maint problems. This has been directly triggered by Chavez nationalising the facilities and pulling all revenue out for national capital expenditure. The refineries and facilities are subsequently degrading rapidly.
Might well be the case. But this is not the whole story. In the short term such degradation is inevitable - old management and commercial links are largely gone. But in the long term it should certainly benefit Venezuella as country - after all, there are no shortage of corporations willing to help Venezuella to drill some oil.

Also, oil money-> home industry transfer is not bad at all. Even if oil output suffers.

The brutal reality (and this is will known within OPEC as well the PChem industry in general) is that Venzuela is rapidly approaching an output/maint tipping point.

When it hits this tipping point of output to maint degradation convergence - then his government will then be in trouble from within.
Personally, i'm sure even if Venezuella oil output shrinks in half, the country will still recive more money than before nationalization.

Chavez has neither the will or comprehension to understand that he is about to turn a resource wealthy country into a production backwater.
We'll see how it turns out compared to equally poor neighborhoods. Might well be the case if Chavez didnt manage to meet right decisions.
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
Might well be the case. But this is not the whole story. In the short term such degradation is inevitable - old management and commercial links are largely gone. But in the long term it should certainly benefit Venezuella as country - after all, there are no shortage of corporations willing to help Venezuella to drill some oil.
But that is not the case. Investors, esp petroleum companies expect to work based on return on investment. Countries that forcibly acquire assets under national interests as per Chavez methods and who do not even provide fixed price plus profit potentiol end up as islands. This is the case now as they cannot get foreign workers and exp main people to undertake basic but necessary repairs and maint. He can't turn to the arabs as some of them have very similar skills depletion issues even though its for different reasons.

Also, oil money-> home industry transfer is not bad at all. Even if oil output suffers.
Not bad? They already have discontent due to the fact that export is worth more and brings in currency. Local pricing and availability actually becomes an impediment under these circumstances. This is already visibly happening.

Personally, i'm sure even if Venezuella oil output shrinks in half, the country will still recive more money than before nationalization.
The money is not going into infrastructure and the community - its selectively distributed to entities such as the army so as to keep him protected from interference.

The community is not seeing any so called benefits from his nationalisation push.
 

Chrom

New Member
But that is not the case. Investors, esp petroleum companies expect to work based on return on investment. Countries that forcibly acquire assets under national interests as per Chavez methods and who do not even provide fixed price plus profit potentiol end up as islands.
Admin: Text deleted. It's fine to have a different view. Its not acceptable to conduct yourself like this. You've been on here long enough to know what expected of members - esp Snr Members. Read the Forum Rules and learn some MANNERS.

1st Warning Issued
Most recent and visible example - Iraq, shows us what in such high profit business as oil - noone cares THAT much about previous contract history. I'm sure you can remember thousands other such examples in last 50 years youself.

This is the case now as they cannot get foreign workers and exp main people to undertake basic but necessary repairs and maint. He can't turn to the arabs as some of them have very similar skills depletion issues even though its for different reasons.
Again - far from truth. There are a lot of much more dangerous and unstable places where oil industry still works. Chavez is by far not unique here, and by far not the worst. So i dont foresee much problems for him to get job done. In fact, by allowing new foreign companies he can even gain outside political points. Like with f.e. corporations from France, or Russia, or China. Hell, even corporations from USA.

Not bad? They already have discontent due to the fact that export is worth more and brings in currency. Local pricing and availability actually becomes an impediment under these circumstances. This is already visibly happening.
Hmm, may be local pricing have something to do with rising world's oil prices? Like 3 times over last 5 years?

The money is not going into infrastructure and the community - its selectively distributed to entities such as the army so as to keep him protected from interference.
Doubt it very much what all moneys go ONLY to army, and nothing in economy. There are new large industrial projects already known. Either way, even all money's to Venezuella army is still infinitely better than same moneys in Exxon Mobil pockets - ofc, for Venezuella.
The community is not seeing any so called benefits from his nationalisation push.
Which community? As i said, previous, "fired" management and linked peoples ofc dont see any benefits. Quite contrary...
 

Salty Dog

Defense Professional
Verified Defense Pro
Not bad? They already have discontent due to the fact that export is worth more and brings in currency. Local pricing and availability actually becomes an impediment under these circumstances. This is already visibly happening
Hmm, may be local pricing have something to do with rising world's oil prices? Like 3 times over last 5 years?
Chrom, it seems you did not understand gf0012-aust's comment. Gas pump prices in Venezuela are heavily subsidised by the government making their pump prices the cheapest in the world.

http://money.cnn.com/pf/features/lists/global_gasprices/price.html

"Critics of Mr. Chávez, and the president himself, agree that the subsidy is a threat to his project to transform Venezuela into a socialist society, draining huge amounts of money from the national oil company’s sales each year that could be used for his social welfare programs."

"Domestic fuel consumption is up 56 percent in the past five years, to 780,000 barrels a day, said Ramón Espinasa, a former chief economist at Petróleos de Venezuela, the national oil company. One-third of oil production now goes to meet the subsidy, he said."

http://www.nytimes.com/2007/10/30/world/americas/30venezuela.html?_r=1&oref=slogin

Less petroleum exports for Venezuela will mean even less revenue.
 

Chrom

New Member
Chrom, it seems you did not understand gf0012-aust's comment. Gas pump prices in Venezuela are heavily subsidised by the government making their pump prices the cheapest in the world.

http://money.cnn.com/pf/features/lists/global_gasprices/price.html

"Critics of Mr. Chávez, and the president himself, agree that the subsidy is a threat to his project to transform Venezuela into a socialist society, draining huge amounts of money from the national oil company’s sales each year that could be used for his social welfare programs."

"Domestic fuel consumption is up 56 percent in the past five years, to 780,000 barrels a day, said Ramón Espinasa, a former chief economist at Petróleos de Venezuela, the national oil company. One-third of oil production now goes to meet the subsidy, he said."

http://www.nytimes.com/2007/10/30/world/americas/30venezuela.html?_r=1&oref=slogin

Less petroleum exports for Venezuela will mean even less revenue.
Yes, of course even less revenue. But let me remind you - cheap oil prices is VERY good for domestic industry. This is stright oil money->industry link. Increased fuel consumption could also mean increased economic activities.

Either way, if internal fuel subsidizing gets too far - he will simply increase internal fuel prices. This is, again, inevitable and is absolutely no problem.

Let me rephrase it so: Subsidizing oil prices few years ago was not Chavez fault. It was not wrong. Reducing or canceling subsidizing will be also right thing to do for Chavez - in the future. Everything is good in right time.
Keeping internal low fuel prices could potentially cause problems - in the future.
 
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