Chevron and Venezuela sign $2 billion loan deal

[Bacchus4.0]

http://news.yahoo.com/chevron-venezuela-sign-2-billion-005510522.html


CARACAS, Venezuela (AP) -- Chevron Corp. has agreed to lend $2 billion to a joint venture with Venezuela's state oil company in an effort to boost production in an oil field in western Zulia state.

Venezuelan Oil Minister Rafael Ramirez signed the loan deal Monday with Ali Moshiri, Chevron's head in Latin America.

Venezuela's PVDSA oil company owns 60 percent of the joint venture, Petroboscan, while Chevron has a 40 percent stake.


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Venezuela has the world's largest oil reserves but production has been falling the past decade. The government has relied heavily on the country's oil income to fund social programs, and reinvested relatively little of it to exploit new fields and replace depleted ones.

[Zorro]

1. Making a deal with the devil

Chevron making a deal with PDVSA, that is....

[naaman fletcher]

2. selling out ecuador. nt.

[Socialistlemur]

3. Ali Moshiri is Rafael Ramirez' buddy

Moshiri is Iranian. Somehow Chavez got confused and took a liking to him, and this put Rafael Ramirez, PDVSa's president, in Moshiri's camp. Chevron has very large holdings in Venezuela, this isn't a new business venture, it's a loan made to a corporation owned by Chevron and PDVSA named Petroboscan. I realize some of you are not aware of the details, but Chavez didn't "nationalize" the oil industry, that was done in 1976. What Bernard Mommer (Ramirez' vice minister, an Austrian socialist who was told to restructure the industry) did was change the legal structure used to link oil multinationals to PDVSA. The change gave PDVSA control over the corporate employee pool. Interestingly, the segregated pool which existed prior to this legal change (which concluded in 2006) did not join the strike in 2002-3 to unseat Chavez. The multinationals are usually stern regarding the engagement of the employee pool in political strikes, and amazingly over 20 foreign oil companies managed to keep about 99 % of their employees at work. But the Chavez government as always aimed at absolute central control. The new legal structure allows them to promote hire and fire using ideological filters. This has reduced the joint venture technical capabilities and consequently dropped production. They are also starved because their cash flow goes to the center and there's no investment. Chevron and other multinationals are using the loan structure to try to reactivite operations, drilling and construction. I'm trying to understand the loan structure but I suspect it's super senior debt. It's paid with oil. This means the deal the Chinese have has become the model. And this puts PDVSA bond holders second in line to collect if PDVSA defaults.