Hugo's big brass band
Tomorrow's the day that several of the Western oil majors will hand over control of their projects in Venezuela to the bloated and mismanaged Venezuelan state oil company. The confiscation will happen not with a low-key signing ceremony, but instead a big brass band, led by President Hugo Chavez himself:
Chavez, who says he is reclaiming the oil industry after years of private exploitation, is expected to be accompanied by troops and workers clad in revolutionary red amid fly-bys by the military’s new Russian-made fighter jets.
Might as well celebrate while he can:
Though Chavez has spent billions of dollars on social projects and discount oil for friends and foes alike, not nearly enough of the Venezuelan oil wealth has been reinvested in new equipment, personnel or training, leaving the state firm woefully unprepared to handle the rigors of the reserve's heavy crude.
Bottom line: A pool of oil potentially bigger than Saudi Arabia will remain just that — potential, undeveloped.