Word: vez
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...less certain that PDVSA really recovered. Before the strike, Venezuela pumped more than 3 million bbl. of oil a day (m.b.d.). Chávez and his loyal Energy Minister, Rafael Ramírez, who is also PDVSA's president, say they're back to 3.2 m.b.d., but even OPEC says Venezuela's output is 2.4 m.b.d. PDVSA's exploration and production vice president, Luis Vierma, warned last July of an "operational emergency" because of a lack of drilling rigs. In recent years, there has been a troubling string of accidents; and oil corruption, the blight that Chávez vowed to eradicate, became...
Venezuela may be sitting atop one of the world's largest oil deposits--Chávez claims there are more than 200 billion bbl. in the Orinoco Belt, which, if true, is nearly 10 times as many proven reserves as the U.S. has. But most of the stuff is extra-heavy crude. Tapping and processing that tarlike oil require billions in investment. Analysts say PDVSA has been slow to start those projects, including joint stakes with China's CNPC, Brazil's Petrobras and Iran's Petropars in southeastern Venezuela...
Then, to complicate matters, Chávez mandated this year that the state own a majority stake in heavy-oil developments. Two major investors, ExxonMobil and ConocoPhillips, walked away, taking critical technology with them. Abandoning its Petrozuata and Hamaca heavy-oil ventures, plus an offshore project, cost Conoco $4.5 billion in impairment charges. The French oil corporation Total signed a deal earlier this month to help fill the void. Still, Venezuela's output "is declining," says Rafael Quiroz, an oil economist at Venezuela's Central University. "If it dips below 2.1 m.b.d. ... it could bankrupt the industry...
...risk to Chávez is that his brand of socialism runs on oil. PDVSA sends more than a third of its revenue to the government, which spent more than $30 billion last year for a vast social-welfare crusade that has helped reduce official poverty and jobless rates appreciably. PDVSA runs many of the programs, and while that might sound more like Marx than Rockefeller, it "reflects our right to set globalization's terms in our people's favor for once," Ramírez has told TIME. Critics say it also means a hyperpoliticized PDVSA, in which Ramírez demands employee...
...irony is that Chávez and Ramírez are adamant that Venezuela can keep delivering to the U.S.--about 1.3 m.b.d., or 12% of U.S. imports. They also insist that in the next few years, investment and output will climb. In 2005 PDVSA launched a seven-year plan, but analysts consider its goals--5.5 m.b.d. by 2012 and $11 billion a year in total investment--a pipe dream. Investment reached half that last year...