Chavez Poised to Nationalize Oil Fields

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Chavez Poised to Nationalize Oil Fields

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Confirming the suspicions of those attuned to Venezuela's volatile president, Hugo Chavez will forcibly take over oil projects in the Orinoco River basin on May 1st. In keeping with his persona, he will send troops to accompany officials of the state-run Petroleos de Venezuela SA (PDVSA) to assume a minimal 60 percent control of oil production.

It remains to be seen what the transnational companies who have invested heavily in new technologies to retrieve the heavy oil of the Orinoco basin will do when they are compelled to take a minority share. The upfront investment is staggering, but the potential rewards have attracted heavy oil specialists from several nations.

AP reports:

The projects - run by BP PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips, France's Total SA and Norway's Statoil ASA - upgrade heavy, tar-like crude into more marketable oils and are considered Venezuela's most promising. As older fields elsewhere go into decline, development of the Orinoco is seen as key to Venezuela's future production.

Negotiations over the takeover have yet to yield an agreement and are expected to be difficult as the companies seek a deal that takes into account more than $17 billion in investments and loans related to the projects.

World News and Prophecy reported on this issue last December:

Venezuela is in the process of certifying its deposits of heavy oil, located in the Faja of the Orinoco River valley. Heavy oil has the consistency of peanut butter, and it is difficult to extract. However, oil prices at over $50 per barrel and ever-more-efficient methods have made it cost-effective to work these fields.

Certification of recoverable oil is underway in the Faja, which holds up to 1.3 trillion barrels of oil. Of that figure, 270 billion barrels are currently recoverable. Added to the other 80 billion barrels of reserve crude, this would make Venezuela the world's largest holder of petroleum reserves. Geologists debate whether the vast Middle Eastern oil fields have reached their peak. Regardless of when they do, they will eventually diminish their output. Heavy oil is next in line as a source of petroleum, making Venezuela of monumental strategic importance to the energy security of the United States, as well as to the rest of the world. ...

The Faja already produces 625,000 barrels per day. More will become recoverable with advanced methods. However, doing so will literally require inventing new technologies, something that Chavez has invited Brazil, Belarus, China, Russia, Spain, India and Iran to create, presumably with an opportunity to share in the profits. Yet, how can they be certain they would?

Read the full article, "Venezuela - Six More Years of Chavez" for a full analysis of current and potential developments in light of Bible prophecy.