Chuck Van Soye's Blog, page 2

American’s Arrest by Chavez Regime Thrust into Presidential Election

That Hugo Chavez is nervous that a loss of power may be in the cards is emphasized in current news stories coming out of Venezuela that an American mercenary has been intercepted and arrested while trying to sneak across the border from Columbia.  Chavez claims the American’s motive was to destabilize the country if he is re-elected. According to the reports, the American’s identity hasn’t been revealed, but note that he is a Spanish speaker.

 This coming October could mark the end of Hugo Chavez’s rule in Venezuela.  And if that indeed comes to pass, China’s dependence on that nation’s oil production could be deeply impacted.  Hugo Chavez’s election opponent, Henrique Capriles, has pledged to revise alleged sweetheart deals between PDVSA, the Venezuelan state oil company, and China.  Capriles definitely does not appear to be a friend of China, which has been pumping billions of dollars into oil development within Venezuela. 

In fact, China may not be totally happy with the oil deliveries that they have been getting.  According to multiple sources, the Venezuelan president promoted as recently as September 2011 that China would see deliveries of one million barrels per day by December 2012.  Yet, according to an August 14th news source, his Oil Minister, Rafael Ramirez, says the current rate of delivery to China is only 640,000 bpd .

 The very real-life danger of severe Chinese dissatisfaction, coupled with the potential fall from power of Chavez, forms the theme upon which the new fiction spy thriller, The China Oil Plot, is based.

Domestic Politics and World Dismay Target Venezuelan Oil

Hugo Chavez and Venezuelan state oil company PDVSA, bracing against a recent whirlwind of accusations and criticisms, prepare for more turmoil as October’s elections near.  According to an article in El Universal, Otto Reich, former U.S. State Department official, Venezuela is violating United Nations sanctions by supplying oil shipments to Syria.  Reich complained, “Soon this fuel will move the tanks and artillery that will pulverize innocent beings, adding to the 12,000 already cold-bloodedly exterminated by Assad.”

But the Syria issue is just part of the storm.  Domestically, Henrique Capriles, the main opposition candidate hoping to unseat Chavez in the upcoming presidential election, vowed to stop gift PDVSA oil shipments to China and other leftist countries.  Noting that this practice may have cost Venezuela $7 billion from 2011’s revenue stream, Capriles claimed this and his production initiatives would enable the country’s chief resource to generate much higher revenues for the country.

According to the July 30, 2012 Standard and Poors review of PDVSA, higher revenues are indeed in the cards.  Whereas PDVSA’s oil production in 2011 came in at an average of 2.991 million barrels per day, expected yield for the next few years will be 3.5 mbpd, and may reach 4.5 mbpd in 2015. 

In light of China’s contributions of $30 to 40 billion developmental loans and exploration investments in Venezuela, and its importance as primary consumer of Venezuela’s oil, it seems that the Chavez’s gifts may have been well placed, and might be hard to abolish even if Capriles wins the elections.  Real serious stuff. 

For a more enjoyable reading of this theme, check out “The China Oil Plot,” a new novel  that that mixes spy fiction within Venezuela with the realities of today’s oil thirsty world.

China Buys Into North America's Oil Assests

If anything demonstrates China’s seemingly insatiable thirst for foreign oil and gas to accommodate its burgeoning economy, it’s this week’s $15 billion takeover of Nexen, Inc.  China’s CNOOC paid a 52% premium when it offered $27.50 per share cash, causing the stock price to jump from $17.29 to 26.35 overnight.  

 Nexen,  a Canadian based oil and gas company  that develops hydrocarbon resources, not only in Canada, but also in the North Sea, Gulf of Mexico and offshore Nigeria, was certainly a lucrative target.  They employ not only conventional land and offshore drilling techniques, but also methods for extracting product from their own oil sands, and collecting gas from extensive shale fields.

Through that takeover, China not only tweeked Uncle Sam’s nose, who blocked a previous China attempt to gain entry into North America, but also administered a good kick in the backside to opponents of the Keystone pipeline project, laughing all the time at their stupidity.  But China is clearly serious when it comes to putting big money on the table as necessary to ensure it will win whatever oil assets it believes it needs. 

For a thorough reading of this story from the Canadian media, go to “Nexen, Inc. Accepts $15 Billion CNOOC Takeover Bid” by clicking: http://www.calgaryherald.com/business/energy-resources/Nexen+accepts+billion+CNOOC+takeover/6977912/story.html .   For a more enjoyable reading of this theme, check out “The China Oil Plot,” a new novel that that mixes spy fiction with the realities of today’s oil thirsty world.

Spy Fiction May Become Real Life Soon

Two of the underlying themes in my new book, The China Oil Plot, are that Venezuela’s socialist state-run petroleum producer, Petróleos de Venezuela (PDVSA),  has failed to yield as much oil as China wants, and that China greatly fears that they might completely lose access to all Venezuela oil production, perhaps due to Hugo Chavez’s loss of power as a result of elections or poor health.

According to a recent story in USA Today, Hugo Chavez is not only mismanaging that production, but may actually be defeated in the coming October presidential elections: “As his election approaches, some experts believe mismanagement of Venezuela’s oil could be the issue that derails Chávez’s hold on power. ‘The lack of direction, investment and maintenance are wrecking the oil and natural gas industries,’ says Jose Bodas, secretary general of the FUTPV, one of the country’s largest oil unions. ‘PDVSA is falling apart.’

Critics charge that the president is destroying the company by packing it with loyalists rather than qualified personnel.  PDVSA’s payroll has more than doubled to 115,000 employees since Chavez took office in 1999, and debt has risen 10-fold since 2006 to $34 billion.  Those increases have seemingly accomplished little: Venezuela’s oil production has dropped more than 25% since 1998 to its current 2.4 million barrels a day, according to OPEC.”

As for the coming October presidential elections, Henriquez Capriles Radonski is Chavez’s opponent in the coming October election. USA Today’s story goes on to say that “Radonski, who trailed Chávez by about 13 percentage points in recent polls, has promised to make the company more efficient and return it to its core oil and natural gas businesses. He has also pledged to revise alleged sweetheart deals between PDVSA and Cuba, China and others.” (My boldface)

That reality has to send chills up and down the spines of China’s oil traders. And it may make the fictional plot of my spy thriller become a Latin America-threatening reality any day now.

China Gains Access to More Canadian Oil/Gas

China’s evergrowing thirst for oil to support its growing economy has led it to a takeover of Canada’s Nexen at a cost of $15 billion.  For full details on story, click http://www.calgaryherald.com/business/energy-resources/Nexen+accepts+billion+CNOOC+takeover/6977912/story.html