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Venezuela election result set to upset global oil politics

Venezuela election result set to upset global oil politics

Hugo Chávez promises to increase production and reduce dependence on US market by doubling crude exports to Asia

Jonathan Watts and Virginia Lopez
The Observer, Saturday 6 October 2012 06.09 EDT

While giant rallies in Caracas may be drawing the world's attention ahead of tomorrow's Venezuelan presidential election, the global significance of the vote can be found hundreds of miles to the east in the oil-soaked Orinoco Belt.

According to studies, Venezuela has overtaken Saudi Arabia to become number one in the world for proven oil reserves, largely thanks to the heavy crude found in this vast alluvial plain.

Whether this multi-trillion dollar asset is controlled by Hugo Chávez or the opposition challenger, Henrique Capriles, will influence which countries and companies are given the priority to exploit them and how much drivers around the world pay at the pump. According to a report this year by BP, Venezuela has reserves of 296.5bn barrels, about 10% more than Saudi Arabia and 18% of the global total. At the country's current levels of production, this would last about 100 years.

If Chávez wins – as most polls suggest – he has promised to ramp up production and reduce his country's dependence on the US market by doubling crude exports to Asia. To further this goal, Venezuela plans to build a pipeline through Colombia to the Pacific which would reduce costs and transport times to China and other Asian markets.

Read more: http://www.guardian.co.uk/world/2012/oct/06/venezuela-electi...

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Wouldn't supply and demand

take effect here? If they double their oil exports to any given country, wouldn't that result in cheaper oil for everyone?

“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James

I wouldn't count on it

With the major oil companies losing control of a greater share of proven reserves, they will have even greater incentive to continue raising prices. Supply and demand are easily manipulated as we have seen.

89%(edited) of the worlds oil is owned by governments

That 10% is split between 6 companies -- which one do you think is controlling this event ? Is logic around here becoming like a shower to a hippy. Most of the worlds oil, currency, tax systems are controlled by government, business's have almost 0 power, and coincidentally 0 armies. Not saying that they don't have a hand in matters but if you consider the power structure in place today it's fabian socialism that is in play here. (495 bb. vs 20.7 bb. -- yeah damn those corporations, and their 3-4 year supply of oil)

(this also explains opposition to fracking when you consider that only 1 country does it)

http://online.wsj.com/news/articles/SB1000142405274870485200...

To be frank I would rather google run the entire US than the feds at this point. At least they are staffed by people that are in the least NOT vampires. Hell even exxon, just anyone that resembles honesty.

Not corporations, they can't even buy toilet paper for christ sakes. What corporation is blocking that?

Hugo Chavez, along with

Hugo Chavez, along with wannabe fellow travelers over at The Guardian, has got to be some of the most economically illiterate clowns to ever open their pieholes about anything, ever.

How the heck do these clowns think Chavez is going to "ramp up production"? By heading out east with a hand-pump? Venezuela's output is limited because the oil is difficult/expensive to extract and refine to the standards customers expect. Not because Chavez somehow until recently didn't feel like producing so much.

Therefore, to increase production, those that can produce the most efficiently must be given access. And that is not Russian and Vietnamese (????) oil companies. Particularly when not even the most incompetent oil executive would not for a second even consider sinking too much capital into a place where someone like Chavez may wake up one day, and simply decide to nationalize it all.

And also, in what alternaverse can Chavez decide where the oil he sells is heading? All "selling to the Chinese" means, is selling to someone with a Chinese name, that will immediately turn around a deliver to the US, if that's where the highest bidder is situated. Oil is a transportable commodity. As such, it goes to the highest bidder. Not to whomever some half literate blowhard claims to sell it to. All that clown's machinations amount to, is reducing the efficiency of extraction of Venezuela's oil, resulting in lower production, and less benefits from whatever production is left. All so that a bunch of backmarkers can sit around a pretend economics somehow doesn't apply to those who are too stupid to understand it.

I wonder who voted you down?

We have some serious statism floating around here. Hugo chavez will go down with the rest of the tyrants as a pathetic potato peeler that got in over his head and destroyed a country - despite however nice his intentions were. Only socialist can stand on a million bodies piled high and still rotting in the sun when they proclaim, "who is going to prevent this next time -- we need a stronger government!".

The bad guys will need to start ramping up

something to get heavily intervened there.