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Big Bad Hugo
Posted by: McQ on Saturday, February 16, 2008

When things get tough, Hugo sends his boys to see a US Senator for help:
Venezuela's ambassador to the U.S. has asked Sen. Richard Lugar to press Exxon Mobil Corp. to drop legal measures that have frozen $12 billion in assets worldwide.

"Through tactics that can only be compared with the very discredited strategy of pre-emptive war, Exxon Mobil has clearly violated the terms of the arbitration process," Bernardo Alvarez, Venezuela's ambassador to the U.S., said in a letter to the Indiana Republican that was released by the embassy Friday. Lugar is the top Republican on the Senate Foreign Relations Committee.

At issue are court orders that Exxon Mobil, the world's largest oil company, obtained in four countries freezing more than $12 billion in Venezuelan bank accounts and properties. The orders were part of Exxon Mobil's effort to get compensation in arbitration for last year's seizure of a Venezuelan oil field by the government of President Hugo Chavez.
You can't help but chuckle about this - my goodness, Hugo has discovered that actions have consequences and when you steal from another entity, they may try to get compensated for what was stolen:
Alvarez described Exxon Mobil's demand for $12 billion "clearly absurd," given the size of the company's investment in the disputed Cerro Negro oil project. In private discussions prior to the court orders, Exxon Mobil's demand never exceeded $5 billion, the ambassador said.
It's called 'lost revenue' ambassador. Clearly something Venezuela's government is now concerned with. And you have to love this:
"You must understand that the actions recently and abruptly taken by Exxon Mobil against Venezuela's state-owned oil company might have a negative effect on global oil trade," Alvarez said in the letter, which was copied to other members on the Senate Foreign Relations Committee.
Ah, the old "it might cause oil prices to rise" ploy. That's actually something I'd think Venezuela would want if possible.

Tough guy's response?
Chavez has threatened to cut off oil supplies to the U.S. and PDVSA has said it won't sell crude and refined products to Exxon Mobil.

Oil and Energy Minister Rafael Ramirez called the dispute an "economic war" with the U.S. and urged Venezuelans to march to protest the court orders that freeze the assets.

Oil workers and Chavez supporters held a vigil at the company's headquarters near downtown Caracas Thursday night.
Nothing like a vigil or two mixed with an impotent threat to make the weekend, eh? That and whining to a US Senator.

Where in the world is Hugo's buddy Cindy Sheehan when he needs here? Oh, yeah, in Egypt protesting for a terrorist organization.

Never mind.
 
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Comments
Although it’s not surprising that a dyed-in-the-wool revolutionary Marxist would so completely misunderstand basic economics, it would behoove of Hugo to get acquainted with the term "monopsony." It’s the reason we know that his threats are empty. He needs the oil revenue to keep his regime afloat, and he’s got nowhere else to sell it.
 
Written By: MichaelW
URL: http://asecondhandconjecture.com
Personally, I’d be interested in seeing what the reaction would be if we banned all Venezuelan oil sales in the United States.

Such leverage is an option we would have had up and running by now, had we simply drilled where we already know oil to be... to say nothing of ANWR, etc.

 
Written By: Bithead
URL: http://bitsblog.florack.us

 
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