The Lowdown on the Venezuelan Oil Industry, Pre-Chavez and Post-Chavez

William writes:

I had the impression that the Chavistas had nationalized the Oil industry; I.E. it was essentially a form of revenue for the government, run by the government, etc. Profits went towards social programs, etc. But that does not equate to “full socialism”…

Venezuela nationalized their oil industry long ago, in 1976. However, it was a patronage aspect of the state, and the workers and management of the state oil company grabbed most all of the oil money, leaving little else for anyone else or certainly for state projects.

The state oil company went on strike and shut down production all over the country in an earlier attempt to ruin the economy a few years into Chavez rule. This latest “make the economy scream” project was not the first – there were a few others before which all failed.

Chavez broke the strike by firing all of the striking management and any workers who supported the strike. A lot of the regular workers were kept on. He replaced fired workers with Chavistas, who were all quite qualified. Chavez then turned the state oil company, formerly a vehicle for nothing but patronage and corruption of an upper middle class light skinned elite, into a state oil company the purpose of which was to provide a vehicle for mass wealth redistribution down to the poorer classes via massive government spending projects.

So there’s your Venezuelan socialism: using the state oil company to mass distribute money down to the people in the form of government spending and social spending projects. But this is pretty much what Saudi Arabia, Iran, Libya under Ghaddafi, Russia under Putin, Norway and oil producing countries have done though, so it is bizarre that we flipped out when Chavez did the same thing.

The Chavistas engaged in a lot talk about building socialism, but honestly as a socialist, they never got around to it.

Incidentally, the US-supported strikers caused major damage to the oil industry during this strike via mass sabotage. There was so much equipment destruction that it took years to get the oil industry back online. So another one of their ways to get rid of Chavez was to try to destroy the state oil company through mass sabotage of its equipment. Incidentally, the US government was massively in on the strike and the sabotage.

You can see that the opposition has tried every tactic they can think of, legal and illegal, to take down Chavez. The only difference now is that they seem to have finally succeeded in making the economy scream.

The oil industry management had gotten hugely wealthy off of what amounted to theft from the state oil industry, and after Chavez fired all of them, these formerly well do to people all lost their very lucrative jobs with nothing to replace them with. So this was one very pissed off group of people who are frankly furious that their huge unearned privileges in Venezuelan society had been revoked. Former state oil company employees are one of the major players in the Venezuelan Opposition.

3 Comments

Filed under Africa, Asia, Economics, Eurasia, Europe, Government, Iran, Labor, Latin America, Libya, Middle East, North Africa, Norway, Regional, Russia, Saudi Arabia, Socialism, South America, USA, Venezuela

3 responses to “The Lowdown on the Venezuelan Oil Industry, Pre-Chavez and Post-Chavez

  1. William

    Once again, I would just like to point out the idiocy of Stefan Moly-Jew, and his “muds have low IQs and will always live in third world squalor” being the case, EXCEPT, when it’s socialism….in that case IQ means nothing, and socialism is to blame!

  2. William

    So did the elites of Venezuela rather than the Internationales, manipulate the economy/what they control, to lead to the issues present?

    https://en.wikipedia.org/wiki/Pedro_Carmona

    I.E. Maduro didn’t have the iron will of Chavez and can’t stop them from essentially forming trusts and hiking the prices, etc.?

  3. Chinedu

    You’ll find that many of these third world government-run oil marketing firms like PDVSA are professional and run more competently run than many large western enterprises. Often times, the oil marketing companies are the only things in these countries that actually work.

    Venezuela has the largest oil reserves in the world. But it’s mostly poor quality oil, heavy and sour. If oil is $45, don’t think that Venezuela is getting anywhere near that. Their oil is discounted to compensate for the low quality. Moreover, they have to import light oil and condensate in order to blend down their heavy, sour oil to make it more marketable.

    The big problem with the oil industry in Venezuela isn’t communism or any other such crap, it’s the low price of oil. Right now they lose money on every barrel.

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