There's an interesting article in the NYtimes today detailing
how Venezuela's PDVSA can't stop declining production because
they can't get enough drilling rigs after chavez declared that
all Energy Service Companies have to donate 10% of the contract's
value to social projects within Venezuela.
It's interesting because even after Chavez nationalized foreign
oil companies assets, or raised the royalty that he required the
IOC's (international oil companies) to pay, he can still get some
idiot gringo oil companies to pay to play in venezuela along with
the chinese, russians and Iranians.
He can even get most energy service companies to work in venezuela.
What he can't get are the true Bubba's, the roughnecks that run
the rigs, to bring more rigs so that more drilling can be done and
production increased. I would bet that it's not just the 10% poor tax
that is keeping the rigs away, but the fear that chavez will nationalize
the rigs once they are in Venezuela that keeps them away.
So now we're in a race against time, if the chinese can build more drilling
rigs and bring them to venezuela before Chavez gets run out of caracas
on a rail, then chavez will be there for the next 50 years and his clones
will keep going long after that. If he can't beg, borrow or steal enough rigs,
then production will keep going down and chavez will have to retire to
panama or Iran.