Chavez Reverses Course

[Toro]

After driving out foreign oil companies by nationalizing their investments, driving hundreds of highly-trained petroleum engineers after he purged the state oil company PdVSA and placing his cronies in the company, and seeing production drop by 1 million barrels a day in the country, Hugh has reversed course, and is now holding an auction for oil concessions in Venezuela.

Venezuelan President Hugo Chávez, gearing up for a long-anticipated auction of oil rights later this week, on Tuesday sought to allay concerns of private investors, as hundreds of students protested in Caracas, accusing the president of silencing a private television channel.

Speaking at a ceremony for the launch of a joint venture between Petróleos de Venezuela SA, Venezuela's state oil monopoly, and Italian energy company Eni SpA, Mr. Chávez said foreign investors have nothing to fear from his government. The left-leaning, populist president has nationalized dozens of private companies over the years, including assets of Eni and other foreign oil producers. Eni CEO Paolo Scaroni called the agreement 'historic" and said the company had moved on from the "many disputes" it had with the Venezuelan government.

Mr. Chávez said at the ceremony that "investment and experience from foreign oil firms is necessary in Venezuela.

"We need it," confessed the president, in a rare concession to critics who charge that his rough tactics with foreign producers, combined with a lack of investment in PdVSA, have undermined the country's ability to further develop its vast reserves and allowed rivals to eat away at its share of the global demand for oil. The auction set for Thursday, for instance, is the first new contest for oil rights in Venezuela since Mr. Chávez came to power in 1999.

Despite the political and economic turbulence in Venezuela, which is grappling with a recession and high inflation, the auction is expected to draw interest from numerous energy companies from around the world. It remains unclear whether foreign producers will compete enthusiastically or make cursory bids for the rights on offer—seven oil blocks in the eastern Orinoco region.

Chávez Seeks to Reassure Investors on Venezuela - WSJ.com

 

[Mr. H.]

But, will Obama learn from this.

 

[Truthmatters]

I think he said that was his plan all along didnt he?