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They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure. They have s
by jondubois 10y ago
They should just lease out licenses to allow foreign companies to draw the oil themselves and use the proceeds to fix their own oil infrastructure.
They have so many options to chose from to fix their economy. It seems like they don't have the will to fix anything. I wouldn't be surprised if there is some sort of corruption going on.
The leaders of the country seem to be intentionally draining the money out of the country (and personally profiting from this).
- PeterisP 10y agoIt's not that easy to motivate foreign companies to invest lots of money, equipment and effort (opportunity cost vs using the same things in other oil fields) after you've recently nationalized their previous investment. Trust is slow to build and fast to lose, they're now facing direct consequences of their earlier actions, and a reversal would likely come only after a regime change.
- tptacek 10y agoVenezuela's oil industry is nationalized.
- AnimalMuppet 10y agoI think jondubois's proposal was to de-nationalize it.
- tptacek 10y agoCan Venezuela's current leadership do that without altering the country's political identity? It's been clear for awhile that the Chavism experiment with oil sector management has been a failure. Is there any indication that they're going to change now?
- AnimalMuppet 10y agoI don't think Venezuela's current leadership can do anything useful without altering the country's political identity. But no, I see no indication that they're going to change now.
- dragonwriter 10y agoWhich, really, does nothing. The problem is that the country's economy is dependent on a single extracted resources for export, making it do well when prices for that resource are high and badly when they are low. Whether its privately extracted by firms paying taxes on income and leases for extraction rights or publicly extracted by the government, the same fundamental problem remains (and the same broad economic results have been seen in economies dependent on a single extracted resource all over the world, independent of the public or private nature of the extraction.)
- AnimalMuppet 10y agoWell, it does some. They're still dependent on a single extracted resource, and the price is still low, but they could actually produce more of it. It wouldn't be a magic fix, but it would be better than the current situation.
- dllthomas 10y agoAlthough really they're not producing it, they're extracting it. Selling more when the price is low might not be the best idea.
- AnimalMuppet 10y agoDepends on how bad you need the money now vs. how bad you'll need it later.
- dllthomas 10y agoVery much so.
- Kluny 10y agoSounds like a job that needs competence, and they don't seem to have much of that in the government.
- douche 10y agoSomehow I don't imagine Royal Dutch Shell will be that eager to dive in again, unless they've got some very strong assurances that the next government isn't going to just pull the rug out from under them again...
- jondubois 10y agoIt seems like a change of leadership would be necessary to restore trust. When you consider this, the corruption actually makes sense. The country's leaders probably know that it's just a matter of time before they are removed from power and are trying to make use that time they have left to enrich themselves personally.
- jessaustin 10y agoThis seems like it could explain all corruption everywhere? After all, "it's just a matter of time" for everyone.
- SilasX 10y agoExcept they've just created a long, immediate history of running the country like a basket case, so they have to pay an enormous premium for foreigners to come in and compensate them for the risk of reneging and re-nationalizing those leases.
- deleted 10y ago[deleted]