Socialism is here - Sen. Warren pushes bill to nationalize US corporations
- Thread starter SlugSlinger
- Start Date
Maybe they can instruct Maduro on how it is supposed to work ... WAIT! Wont they need an endless supply of money first?
Woody
Here's a perfect example of government asset seizures and the outcome.
PDVSA settled with ConocoPhillips on Monday over an outstanding debt issue, a move that the Venezuelan oil company surely hopes will give it some breathing room even as the nation continues to crumble.
Earlier this year, Conoco won an international arbitration award resulting from the 2007 assets seizure by Venezuela. Conoco quickly moved to lay claim to PDVSA’s refining assets in the Dutch Caribbean, a devastating blow to Venezuela that compounded fiscal and operational problems. Without the processing facilities on the islands of Curacao and Aruba, PDVSA’s oil exports plunged deeper in the second quarter.
Venezuela’s revolutionary government has made it a point of pride to resist outside pressure, which makes the latest settlement all the more remarkable. PDVSA has agreed to pay ConocoPhillips an initial $500 million within 90 days, which will then be followed by quarterly payments over the next four and a half years.
The fact that PDVSA agreed to the settlement is a testament to how much of a crisis the company (and ultimately the Venezuelan government) finds itself in, and how important those Caribbean assets are to ongoing operations. Venezuela’s oil production continues to decline. In July, output fell to just 1.278 million barrels per day (mb/d), down 500,000 bpd from the fourth quarter of last year and down nearly 1 mb/d from two years ago. A growing number of analysts see output dipping below the 1-million-barrel-per-day mark by the end of 2018.
The deal comes as the U.S.-based subsidiary of PDVSA, Citgo, is also in the spotlight. A recent court ruling in a separate case exposed Citgo to asset seizure. Canadian miner Crystallex won a case just this month against PDVSA, arguing that Citgo, as a subsidiary of PDVSA, was essentially the same company as PDVSA, which means that Citgo was eligible for asset seizure. A U.S. federal judge agreed, putting Citgo in jeopardy. Citgo is appealing the decision.
PDVSA’s settlement with Conoco could get the American oil company of its back, so long as payments are forthcoming. That could potentially relieve some operational pressure. Presumably, PDVSA could regain control of the facilities on the Caribbean, which should allow for oil exports to resume at higher levels.
But the settlement does not mean that PDVSA is out of the woods, by any means. First, the payments will be painful and hard to meet. The $2 billion that PDVSA owes ConocoPhillips amounts to about a quarter of the cash reserves that Venezuela’s central bank still has left. If the Venezuelan oil company fails to meet the terms of the settlement, Conoco “can resume global enforcement actions,” Daren Beaudo, a Conoco spokesman, told Bloomberg in an email.
Second, it does little to assuage the long line of creditors who are not part of the deal. Indeed, they could begin to fight for the remaining crumbs as the country falls apart.
“Venezuela’s (President Nicolas) Maduro has short-term, patchwork approach to fixing problems. This means that whomever pressures or checkmates the government early enough, will get some cash as country spirals downward,” Raul Gallegos, associate director with consultancy Control Risks and author of Crude Nation, said in a tweet. In other words, the incentive for creditors could be to start grabbing as much as they can as they run the risk of getting nothing by hanging back.
Meanwhile, Venezuela is tearing apart at the seams. Over the weekend, President Nicolas Maduro introduced a raft of economic reforms that will almost certainly do little to solve the crisis, and could potentially increase hardship. He introduced a higher minimum wage, announced a plan to hike gasoline prices and devalued the currency by about 95 percent, one of the most painful devaluations in history. Inflation could top 1 million percent this year. Millions of people have fled the country.
The end result for the oil sector is the same as before: More losses. If PDVSA manages to regain control of its assets in the Caribbean, it could slow the decline. But it won’t be enough to pull the company or the country back from the brink.
By Nick Cunningham of Oilprice.com
PDVSA settled with ConocoPhillips on Monday over an outstanding debt issue, a move that the Venezuelan oil company surely hopes will give it some breathing room even as the nation continues to crumble.
Earlier this year, Conoco won an international arbitration award resulting from the 2007 assets seizure by Venezuela. Conoco quickly moved to lay claim to PDVSA’s refining assets in the Dutch Caribbean, a devastating blow to Venezuela that compounded fiscal and operational problems. Without the processing facilities on the islands of Curacao and Aruba, PDVSA’s oil exports plunged deeper in the second quarter.
Venezuela’s revolutionary government has made it a point of pride to resist outside pressure, which makes the latest settlement all the more remarkable. PDVSA has agreed to pay ConocoPhillips an initial $500 million within 90 days, which will then be followed by quarterly payments over the next four and a half years.
The fact that PDVSA agreed to the settlement is a testament to how much of a crisis the company (and ultimately the Venezuelan government) finds itself in, and how important those Caribbean assets are to ongoing operations. Venezuela’s oil production continues to decline. In July, output fell to just 1.278 million barrels per day (mb/d), down 500,000 bpd from the fourth quarter of last year and down nearly 1 mb/d from two years ago. A growing number of analysts see output dipping below the 1-million-barrel-per-day mark by the end of 2018.
The deal comes as the U.S.-based subsidiary of PDVSA, Citgo, is also in the spotlight. A recent court ruling in a separate case exposed Citgo to asset seizure. Canadian miner Crystallex won a case just this month against PDVSA, arguing that Citgo, as a subsidiary of PDVSA, was essentially the same company as PDVSA, which means that Citgo was eligible for asset seizure. A U.S. federal judge agreed, putting Citgo in jeopardy. Citgo is appealing the decision.
PDVSA’s settlement with Conoco could get the American oil company of its back, so long as payments are forthcoming. That could potentially relieve some operational pressure. Presumably, PDVSA could regain control of the facilities on the Caribbean, which should allow for oil exports to resume at higher levels.
But the settlement does not mean that PDVSA is out of the woods, by any means. First, the payments will be painful and hard to meet. The $2 billion that PDVSA owes ConocoPhillips amounts to about a quarter of the cash reserves that Venezuela’s central bank still has left. If the Venezuelan oil company fails to meet the terms of the settlement, Conoco “can resume global enforcement actions,” Daren Beaudo, a Conoco spokesman, told Bloomberg in an email.
Second, it does little to assuage the long line of creditors who are not part of the deal. Indeed, they could begin to fight for the remaining crumbs as the country falls apart.
“Venezuela’s (President Nicolas) Maduro has short-term, patchwork approach to fixing problems. This means that whomever pressures or checkmates the government early enough, will get some cash as country spirals downward,” Raul Gallegos, associate director with consultancy Control Risks and author of Crude Nation, said in a tweet. In other words, the incentive for creditors could be to start grabbing as much as they can as they run the risk of getting nothing by hanging back.
Meanwhile, Venezuela is tearing apart at the seams. Over the weekend, President Nicolas Maduro introduced a raft of economic reforms that will almost certainly do little to solve the crisis, and could potentially increase hardship. He introduced a higher minimum wage, announced a plan to hike gasoline prices and devalued the currency by about 95 percent, one of the most painful devaluations in history. Inflation could top 1 million percent this year. Millions of people have fled the country.
The end result for the oil sector is the same as before: More losses. If PDVSA manages to regain control of its assets in the Caribbean, it could slow the decline. But it won’t be enough to pull the company or the country back from the brink.
By Nick Cunningham of Oilprice.com
More like escaped from the loony-bin... again...
I feel certain she comes from an underprivileged background.....that is one lacking in real world experiences.
Perhaps someone might suggest that she goes undercover for awhile; do some actual work or something similarly grounded.
Perhaps someone might suggest that she goes undercover for awhile; do some actual work or something similarly grounded.
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