Watching The World: Hugo's back at it
The new year had not even arrived before Venezuela's President Hugo Chavez appeared to have popped the bubbly, boasting that his country will soon become the world's top oil exporter.
"We will reach [exports of] around 10 million b/d in the next decade," said the always-indefatigable Venezuelan, noting that his country was the world's No. 1 oil exporter from 1925 to "nearly" 1970.
Then "the Arabs—Saudi Arabia, Iraq, Iran (sic)—surpassed us," said Chavez, who still crowed that no other country can match his country's certified reserves of 297 billion bbl.
"When oil runs out in the world, the only country that is going to have oil is called Venezuela," Chavez said. "Imagine the pressure there will be on Venezuela in the future." Yep. Sure.
'Not desperate'
Meanwhile, Chavez last week said Venezuela will boost oil output to 3.5 million b/d in 2012 from what he claimed is his country's current level of about 3 million b/d.
"[W]e are not desperate, but we are increasing production," said Chavez, who added that state-owned Petroleos de Venezuela SA has been granted an "extraordinary" $5 billion addition to its budget for 2012 to increase crude output by 500,000 b/d by yearend.
"We have a production increase plan ready to reach 3.5 million b/d of oil in December 2012, with most of this increase coming from the Orinoco belt. Now we are producing close to 3 million b/d," Chavez said.
Chavez was accompanied by Oil and Mines Minister Rafael Ramirez, who spelled out the cost on a per barrel basis. "The cost to produce oil in the Orinoco belt is $1.10/bbl and the cost to upgrade it is $6/bbl for a total of $7.10/bbl."
Chavez sweating
That's all well and good, but even Chavez has to be sweating just a little over money. After all, Caracas was just ordered to pay ExxonMobil Corp. $1 billion for expropriating the US firm's Cerro Negro development in the Orinoco belt.
Then too, Venezuela faces further arbitration with ExxonMobil over the nationalization of Cerro Negro, and more than a dozen other pending claims from companies like ConocoPhillips resulting from a wave of state takeovers.
Where did that "extraordinary" $5 billion come from to boost output? That's hard to say, but the Venezuelan president also announced that his country plans to sign about $8 billion in loan agreements with China this month.
Venezuela will receive a $4 billion loan from the Industrial & Commercial Bank of China Ltd. in addition to renewing a $4 billion tranche of a bilateral fund with the China Development Bank.
Is that called balancing the books or juggling them?
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