Socialist Venezuela Proposes To Privatize Its Collapsing Oil Industry

Good luck with that.


Venezuela sits atop the world's largest proved reserves of petroleum, even bigger than Saudi Arabia's. In 2007, Venezuela's Bolivarian socialist government under President Hugo Chavez seized without compensation the assets of several private American oil production and service companies then operating in that country. In those heady days, global oil prices were ascending and would eventually peak in July 2008 above $132 per barrel. This oil price boom boosted Venezuela's GDP per capita to nearly $15,000 annually, thus bolstering Chavez's political popularity. But peak oil fears abated as they always do when demand draws forth more supply, causing prices to fall.

In the succeeding years, socialist efficiency has had its totally predictable effects on the Bolivarian Republic's oil industry—it's cratered. When Hugo Chavez came to power in 1999, Venezuela was producing more than 3 million barrels per day of crude. With the help of billions in loans from China, Chavez was able to sustain production at around 2.5 million barrels per day. In the past year, production has fallen below 1 million barrels per day, the lowest rate of production in 75 years. As a result, per capita GDP has fallen by nearly half in the past six years.

Now, the Chinese government is apparently becoming reluctant to throw good money after bad. As a consequence, Chavez's hapless successor, President Nicolas Maduro, is now reportedly proposing to sell a majority stake in, and give control of the country's state-owned oil company, Petroleos de Venezuela SA, to private international oil companies. This offer may be less than tempting to Big Oil since the Bolivarian Republic still owes billions to the oil companies whose property it seized 10 years ago.

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  1. We'll buy it, and then go to war for it. Better move fast, though, otherwise those pesky Russians will beat us to the punch.

  2. Fake socialist. Real socialism has never been tried.

    1. It’s been tried plenty.

      1. You don't say. Has sarcasm been tried as well, and would you notice if it had?

        1. I don't know if he's tried sarcasm, but you might want to try suicide. Be sure to stream it on Facebook, though, so we can watch and laugh at your pain and impending death.

          1. I don’t think you’re replying to Original Buttplug.

            1. He who dons the mantle of the Buttplug, shall be riddled with scorn.

              1. Amen

    2. That's the oft repeated lame excuse for why it has a 100% failure rate. Only and imbecile can't see through it.

    3. If you define "real socialism" as successful socialism, then you are correct. There are hundreds of examples of your "fake socialism" and none for "real socialism". After 74 years of failure in the USSR it remains after destroying the USSR, along with a resurgent opposite economic system, capitalism. Which one is now the most popular based on performance (success)? Ask the people who suffered from anti-capitalist reform. They speak from first hand experience. Do you?

  3. This is gonna be interesting.

    A. Socialists privatizing an industry -- proof it's not real socialism.

    B. Socialists privatizing a fossil fuel industry -- even better proof it's not real socialism.

    C. How many oil companies are stupid enough to take Maduro up on his offer, and under what conditions? "Here, take it back for $1, no hard feelings."

    Of course, all true socialists already knew Maduro turned Chavez's real socialism into dirty capitalism. No surprise to them. Greta probably predicted it when she was 10 or 12.

    1. How many oil companies are stupid enough to take Maduro up on his offer, and under what conditions?

      One might suggest ConocoPhillips should have first dibs on a price tag of $0 and a sincere apology from the Venezuelan government.

      1. But would you dare repair the plant and infrastructure?
        First time you pumped a barrel out at a cost that means a profit, those scumbags would be back on you like stink on shit.

        1. Of course: once it starts making profit, that’s exploitation, and they’d just have to nationalize it again.

        2. "First time you pumped a barrel out at a cost that means a profit, those scumbags would be back on you like stink on shit." --- Sounds almost like how the USA works today.

      2. This is just a Hail Mary from Maduro, who is willing to bitterly swallow this to cling to power.

        As socialists are the true ‘bitter climgers’

    2. I kind of love that your comment is just mine, with a ton of extra stupid blovation.

      Ah well, imitation, etc, right SQLSRY?

    3. You mean, how many oil companies are stupid enough to do this AGAIN?

      Given the technical challenges of Venezuela reserves (mostly heavy oil and tar sands), the crappy status of the global oil market (unless we get a real shooting war going in Iran), the corporate metrics that might include operating at a profit, and the legacy of previous nationalization events, probably not.

      But the Chinese oil "companies" have different views of these issues, and might just make an offer that Maduro can't refuse (now and in the future).

      1. Chinese oil companies have an advantage in that China might well be willingly to use far harsher methods than the US would to protect their property.

      2. the crappy status of the global oil market

        Crappy? Crude's currently selling for exactly the mean inflation-adjusted price since the end of World War 2, and 150% of the mean price over those years. So currently we've got average-to-high oil prices.

    4. Don't forget, this is the same ideological mindset that was in charge of Chernobyl

  4. You would have to be absolutely insane to buy anything from Venezuela. How could you trust them not to just turn around and seize it again?

    1. A perfect pretense for war ... and a freedom war.

      Give it another five years or so. If we're not invading Venezuela by then under the pretense of preserving the oil industry for the benefit of a free Venezuelan society, I'll be truly shocked.

      1. That didn’t happen last time.

      2. Prepare to be shocked.

  5. By "privatize", they mean give it back to the companies they stole it from. Right?

    1. In a place where property rights no longer exist, how can "privatize" mean anything at all?

    2. Except that U.S. sanctions won't allow it.

  6. Wait, what? Venezuela has an oil industry?

    1. The have a busted skeleton of an oil industry. They do have a lot of oil underground. I say we wait a bit more until they are really desperate and buy it on the cheap.

      1. Horizontal drilling from Puerto Rico!

        1. I like the cut of your jib.

  7. If it moves, tax it. If it keeps moving, regulate it. If it moves slowly, nationalize it , if it stops moving, subsidize it. If it's putrid and maggot infested, privatize it.

    1. If the people don't want it, mandate it. If the people desire it, ban it.

      1. ... And to think anyone could possibly entertain the belief that the [WE] gov-dictator party isn't about "destroying" mankind and individual freedom but about "helping".

        The arrogance of left-wing party participants is astonishing... All the ones I have spoken to always resort to the same justification when approached straight-on, "We know what's better for you than you do."

  8. Venezuela sounds like it might not be a desirable place to live right now. As a Koch / Reason libertarian, I would therefore like to invite the country's entire population to immigrate to the United States.


    1. Top three reasons for Koch to move to Venezuela
      1. He trades his dollars for Bolivarians and instantly becomes a super trillionaire
      2. He no longer has to para Espanol o prima dos.
      3. He loses 19 pounds.
      As the Duchess of Windsor would say "You can never be too rich or too thin."

      1. As the Duchess of Windsor would say “You can never be too rich or too thin.”

        Residents of Auschwitz disagree.

    2. I would therefore like to invite the country’s entire population to immigrate to the United States.

      We could do a big swap, where we send all the socialists pining for paradise down south in return for all those that got to experience it firsthand.

      How lovely were the likes of Bernie, all his bros, AOC's squad and posse of imbecilic lemmings all having a huge fiesta after arrival, feasting on dog tacos after rummaging in trash bins for condiments and sides, then wiping their arses with banana leaves when the inevitable occurs.

      No one deserves such a utopia more.

      1. This is why immigrants from Eastern Europe are preferred - they have that experience.

    3. The ones we want are already here.

  9. "...socialist efficiency..."

    That particular quality is evident only in the cases of mass-murder and starvation.

    1. They aren't even particularly efficient at that.

      One thing which always amuses me is the idiots bragging on how efficient the Nazi war machine was. Well, except for the overly complicated weapons designs. And the failure to switch to a "war economy" until 1943. And oh yeah, murdering, at great expense, their own citizens, who could instead have been productive war workers and tax payers, and murdering all the East European anti-Communist partisans who welcomed them as liberators, turning them into anti-German partisans at even more expense to the Nazis.

      Yeah, really efficient they were.

      1. One thing which always amuses me is the idiots bragging on how efficient the Nazi war machine was.

        Bragging? Who the fuck do you hang out with SQRLSY?

        But if course, you're stupid and incorrect objections are certainly evidence that a middling European power punched above its weight through efficiency...

        And oh yeah, murdering, at great expense, their own citizens, who could instead have been productive war workers

        Wow, you really are fucking stupid SQRLSY

        Even before the war, Nazi Germany maintained a supply of slave labour. "Undesirables" (German: unzuverlässige Elemente), such as the homeless, homosexuals, and alleged criminals as well as political dissidents, communists, Jews, and anyone else that the regime wanted out of the way were imprisoned in labour camps. Prisoners of war and civilians were brought into Germany from occupied territories after the German invasion of Poland. The necessary labour for the German war economy was provided by the new camp system, serving as one of the key instruments of terror.

        Oh and the dumb "war economy" observation?

        The Nazis believed in war as the primary engine of human progress, and argued that the purpose of a country’s economy should be to enable that country to fight and win wars of expansion.[4] As such, almost immediately after coming to power, they embarked on a vast program of military rearmament, which quickly dwarfed civilian investment.[5] During the 1930s, Nazi Germany increased its military spending faster than any other state in peacetime

        Holy shit Old Mex, you managed to get literally everything you bitched about wrong.

        How are you so consistently stupid?

        1. The war economy statement is perfectly accurate, one of the reasons why the Allied strategic bombing campaign failed to curb production till late '44 early '45 is that the Germans were gearing up and "rationalizing" their economy at the same time as the campaign was going on, even then Speer in late '44 diverted a huge amount of Germany's nitrogen production from arms production to farming because he was convinced the war was lost. Now it is true that Germany increased its military the most out of anyone in the 1930s but that mainly because of the Treaty of Versailles limit on the size of the German Military so it went from practically nothing to the size that a nation-state Germany should have in the space of a few years.

          1. +1, the failure to ensure that railroad workers kept working during the month of December was one of the reasons they failed to capture Moscow. Many of the German workers went home for the entire month. So, the rail head made no progress and supplies were reliant on trucks (without AWDs) along poorly built roads.

            They couldn't use the existing railways due to gauge size and scorched Earth policies.

  10. Dunno where the vid pop-up in the loer right comes from, but it's currently head-lining "Venezuela's economic collapse". It's odds-on the 'reason' is US sanctions!

  11. Wait. So they stole it and now they're trying to sell it back to the corporations they stole it from? lol k

    1. Sounds like the election debate huh 🙂

  12. The proposal, which could offer a balm to the country’s disintegrating oil industry, is in early stages and faces major obstacles. Venezuelan laws would have to be changed, there is disagreement over how to finance the operations, and Washington’s sanctions bar any U.S. companies from doing business with the Maduro regime without a waiver. The sanctions have also discouraged non-U.S. firms from investing in Venezuela.

    The big question is whether Maduro simply sees this as a way to prop up his political fortunes or if he has in fact learned a thing or two about socialism and capitalism and realized he's made a terrible mistake. It doesn't do much good to privatize the oil industry if the revenues are just going to be used to subsidize socialist stupidity in the rest of the economy.

    And as far as selling off the oil company, it's not the ownership so much as the management that's the problem - I'm pretty sure the Saud family aren't over there personally running the refineries and the gas stations, they hire that stuff done and they do very well that way. All Venezuela really needs is a non-socialist view of the value of the division of labor and those middleman parasites who just sit around on couches all day doing nothing while they get rich exploiting the labor of the workers. Labor all you want, unless there's somebody knowledgeable about how to turn sweat into cash money the labor gets real inefficient real fast.

  13. Socialists are good at the taking part of nationalization. Just not the running part of nationalization. That’s really the most important part of nationalization. Any ridiculous government can take a company.

    1. Well said... But.. if they cannot TAKE it how can they "run" it? And maybe that's the whole point. Government shouldn't be running things but instead should be at the will of the people creating and enforcing wide-arena-boundary action-limits called laws meant only to protect their citizens from others that might inflict crimes against them. Too many times when socialist systems "run" things; the winner ends up being the system(gov) and the inflicted is the people.

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  16. Doesn’t matter what offers he makes to oil companies. Maduro needs to end up like Mussolini. He and his mentor already ruined their country by driving every intelligent person out, and now that many of those left behind are protesting for his removal, he is shooting them. The scumbag is overdue to be strung up feet first from a lamp post just like every tyrant.

  17. I doubt they will see much interest without a regime change. Right now it just looks like they want the private companies to turn he industry around just so they can nationalize it and seize all the assets again

  18. Once the oil company gets everything working again, what do you suppose will happen?

  19. > Socialist Venezuela Proposes To Privatize Its Collapsing Oil Industry...

    .. that way they can blame the capitalists for its collapse!

  20. Socialism starts by spending all the gold from the golden goose, then it eats the food the goose needs to live before eating the goose itself.

  21. Rinse. Repeat.

  22. They are gone. They left Venezuela long ago. The managers, engineers, capitalists, skilled workers, all who could have left are gone.

    If you have ever seen a company collapse this is what it looks like.

    Socialism is a broad term. In the case of Venezuela it was not just socialism, terrible as that is, it is the worst managed socialist state in modern history. Even Cuba is not totally FUBAR.

    1. Which reminds me. Will the new private ownership still send free oil to Cuba?

  23. As long as a coercive govt. exists, the free market, i.e., capitalism is impossible. Sadly, the world has only socialism in varying degrees. Not one govt. uses reason, rights, choice as a basis for governing. All are coercive, based on the initiation of violence, threats, fraud. This faith in force is a worldwide superstition that destroys what a little freedom manages to innovate/create. A voluntarist govt. would be as a beacon, an oasis of sanity in an insane world.

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