Thursday, June 01, 2006

Another poor job by the NYT on Venezuela and its heavy crudes I find it remarkable that this type of article gets by the New York Times Editors. besides the many factual errors like production levels, area and the like, there is the fact that indeed Venezuela may have amazing reserves of heavy crudes, but funny how no mention is made of the Alberta tar sands, which may not have the reserves of the Venezuelan ones, but it may only be a factor of two off. Business people are not brain dead. When they decide to go somewhere and invest, they run numbers, do risk analysis, then models and that determines where they will invest. So compare the conditions in Venezuela and Canada, which the people who wrote the NYT article appear to have no clue about neither of them, and you get: Venezuela: Breach of contracts. No rule of Law. PDVSA has to own at leats 60% 33% royalties 50% income tax Breakeven point ~$25 per barrel Canada: Rule of Law You may own 100% of the production company Royalties of 1% until revenues generated are equal to investment, 16.6% after that 24-28% income taxes. Breakeven point ~$12 per barrel Yes, costs in Venezuela are somewhat lower, lower labor costs, fewer enviromental regulations, but the difference is simply not worth it. That is the reason why Canada's heavy crude production is already twice the Venezuelan one and growing, while Venezuela's is not epexcted to increase in the next two years. 10:18:09 PM    comment []

Chavez' brainless diplomacy at the OPEC meeting inauguration Today at the opening ceremony of the OPEC meeting in Caracas, Venezuelan President Hugo Chavez, remembered a letter written to him, and his reply to it, by his "friend" the terrorist Carlos "The Jackal", ,who is serving a lifetime sentence in a French prison for killing three people in Paris, including two secret service agents. This was a touching and brainless remembrance by our President in front of the OPEC delegates, given that Carlos "The Jackal" is infamous for, among many terrorists acts, the kidnapping the 12 Ministers of OPEC, holding 70 people hostage and killing the security detail at OPEC's Vienna’s headquarters. Reportedly he got paid one million dollars for this action by none other than Libya’s President Gaddafi. What's next, toasting Bin Laden at the dinner which closes the event? Anything is possible in the mindless ways of Hugo Chavez. 8:14:00 PM    comment []

A heartbreaking video of hunger and infant deaths in Venezuela I know most of you don't speak Spanish, but these are images of a town in Zulia where 30 kids die monthly, where hunger and malnutrition are the rule of the day, while Chavez travels giving away the country's money to promote himself. Maybe it is better you don't understand, it is simply heartbreaking. 1:48:16 AM    comment []