A brief history of Venezuela's oil production

Communists (and all totalitarians) are one-trick ponies:  they have one tool in their toolbox, which is to threaten to imprison or fire anyone who doesn't obey them.

This always has...interesting...results.  Meaning disastrous.  But in a few years the communist sons of whores in the Mainstream Media will have re-written history to erase the blunders of the communist rulers, eh?

It's a really well-functioning scam--if you're a communist. 

Example: In 2003 thousands of workers for Venezuela's national oil company went on strike against the communist government of Hugo Chavez.  Chavez responded by firing over 18,000 skilled, experienced oilfield workers for participating in the strike, replacing them with 20,000 unskilled but obedient political loyalists.

See, people who don't know jack-shit about oil and oil wells think "All you have to do is drill a hole in the ground and oil comes out, forever!  How hard can it be, eh?  And if an American oil company has already spent the money to drill the hole, it's even less work, as I'll explain below.

Drilling most oil wells is staggeringly expensive, so for over a century oil companies have offered to drill wells at their sole expense in areas they felt might produce oil.  If the well did  produce commercial quantities--and in a new area that usually only happened about once out of ten tries--the terms of the agreement gave the oil company one-eighth of the value of the oil produced, with the rest (7/8ths, 87.5%) to whoever owned the mineral rights.

That's been a standard deal that's made thousands of formerly poor farmers and ranchers in Oklahoma, Texas, Kansas and North Dakota millionaires--without their having to invest a dollar.

So...American oil companies, under that standard agreement, drilled virtually every oil well in Venezuela.  Those wells made that nation the 4th richest in the entire world in 1980 or so, and the richest in all of Latin America.

Seriously.

But communists, like U.S. Democrats, are notorious for ignoring any law or contract they suddenly don't want to honor.  (If you're a Democrat and would like to argue with me about that, give it your best shot.  The examples are legion.)  Chavez saw a way to increase his oil revenue with the stroke of a pen, by simply DECREEING that the contracts his nation had signed were now void, and that his government was seizing all the rigs and incredibly expensive, sophisticated equipment used to keep the wells flowing.

That's called "nationization," which sounds much better than "stealing" or "seizing," eh?  Sounds harmless, which is why it's the term used.

SO...Decades ago three U.S. oil companies signed leases with the Venezuelan government, making the country fabulously wealthy.  Then in 2006 Chavez saw a chance to steal the oil companies' 1/8th share.  And like all totalitarian dictators, he couldn't resist.

And there you see communism, socialism and all totalitarian regimes laid bare, eh?  "We'z gonna take dat, cuz we gots duh gunz, an' yew oil companies don't," eh? 

So how'd that work out for the communist son of a bitch?

The Media won't try to tell ya cuz they wanna devote all their news to bashing Trump, so I'll do it:  Most people understandably don't know jack about what's involved in producing oil.  And to understand what Chavez's and Maduro's stupidity caused, you need to know at least a tiny bit about what's involved.  So here's an analogy: 

Suppose you wanna replace a sparkplug on your car.  (For beta males who have no idea what that is or how the hell to do it, never mind.)

For guys who aren't betas, now imagine trying to replace that sparkplug using a wrench at the end of a mile-long handle...blindfolded.  And if you make a mistake,  high-pressure gas blasts out of the hole and turns into a 300-foot-tall torch, turning your drilling rig into a melted steel pretzel.

Until you've seen it, as I have, you have no idea how powerful the forces are. 

SO...Chavez's replacement of over 18,000 skilled professionals with untrained but politically reliable workers and managers was like asking a first-year med-school student to do heart surgery.  Even though Chavez still had all the equipment he'd seized from the U.S. companies, his people didn't have the training needed to use it in any but the simplest operations.  

The result was that Venezuela's oil production dropped like a rock:  before the communist asshole's mass firings, Venezuela was producing about 3.5 million barrels of oil every DAY.  Today AI says Venezuela has a grand total of "about 2" [sic] active oil rigs.  Which means they can't even begin to keep their wells producing.  

As a result, production has plummeted to about 650,000 bopd.  At today's prices the drop of about 2.8 MILLION barrels per day represents a loss to that country of around $150 million per DAY, or just under half a BILLION dollars per month.

Think that might have a negative effect on your economy?

Now: I'm getting a kick out of watching the stupid, clueless, Democrat-fellating, Trump-hating Mainstream Media speculate on what the capture of Maduro will do to oil prices.  Half the "experts" say oil prices will rise, the other half say they'll fall.  From which you can correctly deduce that it's a big mystery.

One relief is that almost nothing will change for the next year at least, because it's gonna take a year for U.S. companies to make new agreements and start reviving wells.

Democrats and leftist Media rulers: "Whut all dis stuff about 'maintaining' oil wells?  Once yew drill duh well, duh oil always keeps comin' out duh ground all by itself, citizen!"

Your statement shows you know nothing about oil production, so better to stick with bashing the U.S. for arresting Maduro, eh?   

American oil companies obviously have the expertise to restore Venezuela's oil production, but after the communists seized ("nationalized") U.S. company assets and equipment twice, I suspect the companies won't be rushing to pour billions into Vz until the commies who still run that country show what they wanna do. 

And despite all the Democrats and Mainstream Media outlets screaming "regime change!" the communists are still running Venezuela.  They control every post in government.  The acting president, Delcy Rodriguez, is a hard-line communist.  Her brother--another hard-line commie--runs the National Assembly.

A novice would say "It's up to the people of Venezuela to decide who they want to rule them."  But like the people of Iran, the people of Vz were disarmed by the commies years ago.  And as the most recent stolen election there showed, the communists have no qualms about stealing elections.  So it's unlikely the commies will lose control for many years.

Meanwhile U.S. Democrat congress-critters have vowed to ask the International Criminal Court to order the U.S. to return Maduro to power in Venezuela.

And so it goes.