by DemocracyRules
Last week, Chavez pounded tables and things, and threatened to cut off shipments to the U.S. because he was mad at Exxon Mobile. He had grabbed some of their Venezuelan projects. Then Exxon got the courts to freeze about $12 billion in Venezuelan assets abroad. He may still try to cut off Exxon from buying Venezuelan oil, but that would not significantly affect Exxon. They buy worldwide.
However, today he says, "We don't have plans to stop sending oil to the United States... [but we would if the U.S.] attacks Venezuela or tries to harm us."
Chavez nationalized petroleum areas in the Orinoco River basin last year. They contain heavy oil, which is not easy to refine. Exxon Mobil ceased heavy-oil upgrading operations in the Orinoco basin after Chavez changed the terms of the contract. Several other oil companies have stayed as minority partners, but it’s risky to stay. Chavez has threatened to impose a new tax on them.
As I said earlier, Chavez can’t afford to cut off the U.S. because it takes years to set up new steady customers, and heavy oil is a less desirable product. American refineries are already set up to handle it.
Right now, the U.S. gets about 11% of her oil from Venezuela.
Pro Patria
Comments