Musings: Chavez Seizes OFS Assets: Obama Grabs Chrysler Loans
We were dismayed to see that the small group of Chrysler secured debt holders have given up their battle to gain a better deal from the bankruptcy court in the Chrysler restructuring due to pressure from Pres. Obama and his administration. This news came at the same time President Hugo Chavez of Venezuela acted under a newlyenacted law giving him the ability to seize the assets of oilfield service companies working in Venezuela for PdVSA, the stateowned oil company, who were determined to have taken unfair advantage of the state-owned company during the industry boom of 2007 and 2008. These are many of the same companies that PdVSA has not been paying because it doesn't have the money for the invoices.
Upon reading these two stories in the Saturday morning edition of the Calgary Herald, we immediately thought about the picture of the two presidents shaking hands and smiling at the summit meeting of the leaders of the hemisphere's democratic leaders last month. There was substantial outrage voiced in many quarters about the significance of the handshake and the willingness of Pres. Obama to engage Pres. Chavez. Maybe there was a greater kinship between the leader of the Free World and the socialist leader of Venezuela than any of us thought at that time.
We were extremely disappointed that Pres. Obama used his "bully pulpit" to attack the secured debt holders in Chrysler who were exercising their fiduciary duty to seek the maximum return for their investment through the well-established legal workings of the bankruptcy court structure. We now must consider that the United States has started down the slippery-slope in which the "ends justify the means," which violates the rule of law foundation of our country. As a result of this development, we anticipate that next year in the various business and credit risk assessments of countries, the United States will rank much lower than at any time in the past.
Energy industry executives seriously must consider the proposition unveiled in the Obama budget that the energy industry is to be a "piggy bank" to help fund the President's grand social vision. Higher taxes, greater restrictions on access to federal lands for oil and gas exploration and political attacks on the morality of "dirty fuel" executives will color the next three and half years. I guess a religious person might describe the new environment as the "lean years" that are supposed to follow the "fat years." It is one thing to lose some fat, but when an industry loses muscle and bone, the risks are magnified immensely.
WHAT DO YOU THINK?
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Managing Director, PPHB LP
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For the next seven plus years I lived in "Oriente" the Easteren part of the country.
I lived the country's evolution, through the Venezuelan Medias rude awakening to the fact that they had fallen in love with the wrong "novio". So like a Virgin Arrepentida" sought the morning after pill. But it was too late!- And eventually Hugo would kill the 54 year old Media bride - RCTV. The Quinta republica political party had a baby, and so the Uncles were brought over to see it. Fidel brought his gifts with hundreds of unemployed Doctors, medics and specialist and the proud father pledged 500,000 BBls P/D of Oil to Cuba. The Argentinian Uncle sent some Meat But Hugo would later deliver to them about 880, 000 Dollars in a suitcase - a little campaign contribution. Ignacio Lula Da Silva and Poor Evo Morales are all mystified under the spell of this - Guapo de barrio.
I Watched in disbelief how the ONLY possible chance to remove Hugo slipped away. Thanks to the badly handled coup, The opposition marches the. endless elections, the interminable "Cadenas nacionales de radio y television". The "paro nacional" the arming of "Circulos Bolivarianos" the referndums with Jimmy Carter's blessing and the PDVSA "despedidos". We Watched by the sidelines the approving nod of the Hugo when the poor squaters stole from the land owners. And now..... the handshake!!, You know what I mean. (Profesional society polarizers.)
Wow, Im not formally educated but I'd bet I could handle foreign affairs better.
"You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away peoples initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves."
.....Abraham Lincoln
What this amounts to is fostering mediocrity, eliminating competition and driving those who have both (1) the capital and the (2) appetite for risk out of the business.
This will eventually result in a fall of our economic standing, unless something is done to change it. WE have a collective voice, and should use it.
He often uses this resource and threatens to cut off supplies to the US. I say do it and see how long Venezuela will last without this revenue. His latest move to take over the assets is only a scheme not to pay the contractors.
Everything Chavez does is either for HIS benefit or to hurt the US. Wake up people and stop this dictator
Chavez has oppressed his countrymen for 10 years already in spite of an unprecedented - almost obscene - revenue from oil exports, and he has been accused of countless human rights violations. This has clearly been allowed for too long, and the US and the international community are to blame for their shameful passiveness. I think the Obama’s and the previous administration are making a big mistake by letting Chavez get away with his fake Socialism, which has already been spread throughout several countries in Latin America. Venezuela is dangerously close to the US and although Venezuelans are very kind in nature, the threat may come from a mix of Iranian nuclear weapons and Venezuelan Uranium nurtured by Castro’s hatred. It is contradictory how the US has taken measures to protect itself from terrorism within their borders and far away (Afghanistan, Iraq, etc), but has overlooked at Chavez due to the fact that, although openly and repeatedly insulted President Bush and the “American Imperialism”, he continues to provide with important oil imports to the US.
Communications between Obama and Chavez are one method to resolve problems. Bush's isolationistic philosophy did nothing, and without the ability to interact this is bound to continue. This doesn't mean that Chavez is going to act in anyone's best interest other than his own. He is the leader of Venezuela, and we need to have dialog or we will end up doing nothing.
Your comments regarding Chrysler are not related to Oil Field activities and points out that this article is more of a political editorial than it is a news item. Is Rigzone a political instrument or does it supply news related to the oilfield?
In one case the company in question, Chrysler, is destined to go into bankruptcy and insolvency without government interceding.
In the other case the Government, Venezuela, is likely to go into insolvency due to a drop in commodity prices of its sole source of income so it decides to fleece foreign companies doing business there.
I don't know about you, but I don't want my tax dollars to continue to prop up a limping company on its last legs. The same secured debt holders you are sympathetic to are the same folks that caused the greatest depression since 1929.
Thanks but No Thanks. I am not buying what you are selling.
A sensible transition to gradually evolve the "green energy" potential over a period of several years seems to have totally eluded the Obama Administration. Instead, the industry is virtually shut down.
Heretofore investors in oil and gas have relied on reasonable tax breaks and risk incentives to explore here in the Western USA. As a cover-up to already evident congressional gross mismanagement of the banking business, major manufacturing (GM, Chrysler), insurance (AIG) and a growing list of others, the government is turning once more to the "evil" oil companies as a scapegoat as the only recipients of "greedy, selfish" tax breaks.
Last year Barbara Boxer (dem, California) threatened to nationalize the oil and gas industry. During his campaign, Obama threatened to "bankrupt" the coal companies.
I have yet to see any (I mean ANY) politician, Republican or Democrat, have the guts to exhibit a pair of brass ones and stand up and make real noise against this full-blown charge into the the Marxist camp. It appears that Obama and crew are seriously studying and absorbing the "Quotations from Chairman Hugo."
Obama's words are identical to Chaves' just much better spoken. But I do think America is starting to wake up to his Socialistic and possibly Communistic ideology.
Who in their right mind would make multi-billion dollar loans to a company that hasn't shown a profit in ages? Mercedes sold Chrysler for a reason - they saw the company had no future. And why should the government get involved in helping a privately owned corporation stay solvent (using taxpayer money)? What happened to free enterprise and our fair market system? No one is offering to pay me for the "losses" I have incurred with my investments. I'd sure appreciate for someone to make me "whole" again!
Government should not be involved in the operation or funding of private enterprise. The more government intervenes, the closer we come to having a socialistic economy. "Big brother" will decide who survives and who perishes, who has a house and who doesn't, who has a new car and who doesn't..... Where will it stop?
However misguided some of the current President's actions may seem, in my opinion they are no more or less so than those of the preceding administration. Apparently the ends justified the means then (invading Iraq as a shining example), and that suited your view just fine, although it involved a different set of people being "persecuted", as you claim to be being persecuted now.
If you are saying you enjoyed the fat of those years (including the eventual opening of the Iraqi oil fields to American and International oil companies operating out of the USA, finally taking place now) maybe you should start cultivating your own operations to take maximum advantage of the current political conditions, rather than just bemoan the fact that this administration may be trying to alleviate the severity of global issues including a global financial crisis which in no small amount was due to too severely deregulated US banking and financial systems, climate change and an overall energy shortage predicted for the future. Retaining domestic fields intact will ultimately result in a a stronger position for the US in the future, both from an economic as well as energy-independence viewpoints.
As someone working a job that takes me away from home for months at a time, working 80+ hour weeks, I do not see how you have the right to even argue the point illustrated above. If instead you put as much time and energy into developing a product (in my case natural gas from tight shale) that addresses some of the issues we face, rather than creating a rather dubious argument, the entire country might soon be in a better place.
Yours sincerely,
Alastair M. John
Wellsite Geologist
The days of the producing class avoiding the taking of a political stand in defense of Libertarian principals for fear of being targeted for retribution should their publicly preferred candidate lose the election must finally give way to principled and energetic activism. Unity across the spectrum of this class is not simply a nice sounding preference at this point but a necessity. The Statists are so united and committed. If they are not in like manner vigorously and persistently opposed, and their policies and programs dismantled by a united Libertarian front then a preview of life in a future America can be gained by looking at Europe. When in the last 200 some years has Europe ever acted as a positive role model for America?
If we would not be incorporated into the "Borg" like so many domesticated cattle, then we must unify in defense of individualism, liberty, minimal taxes, a minimized State, and a society of equal opportunity but outcomes based upon risk and industry. Unity on this side must be firm and determinedly kinetic going forward. If not, provided they can still read, your children and theirs will only be able to view America's best days in the pages of some old, unrevised history book that they may be able to pick up at a garage sale.
The petroleum industry, like many others gave support to the Statist philosophy over the years, overtly or tacitly through half-hearted and weak defenses of the industry and its crucial contribution to the betterment of the nation and the world in general. If we sell your soul (mind) to the Devil, should it be any surprise to find ourselves in hell?