Venezuela's economy - their oil reserves and what can be done to help

I do not believe it was some outside force that caused their problems. Only greed and stupidity by the leadership.
foreignpolicy.com...

The decline and fall of Venezuela’s oil industry essentially begins with its nationalization in 1976, a time of booming crude prices and rising resource nationalism. President Carlos Andrés Pérez sought a much greater role for the state over the economy and especially wanted to use the country’s fast-growing oil wealth to turbocharge development. That year, to gain full national control over the oil fields, Caracas banished foreign oil firms and created a new, state-run oil monopoly called Petróleos de Venezuela (PDVSA). The moves marked the capstone to Pérez Alfonso’s decades-long dream of Venezuela grabbing full control of its destiny. It was also the logical outcome of the widely held belief that the country’s oil, discovered in 1922 on the shores of Lake Maracaibo, was national patrimony.

How many times have we heard of some banana republic nationalizing certain segments of their society and then installing all their cronies to run things. Yep they run things by skimming money, for they don't know a darn thing about running a company..
Then comes Chavez...

Giusti, alarmed by Chavez's plans for the oil company, resigned just as he took office in early 1999; he was then replaced by a revolving cast of political appointees. The departure of Giusti, who’d spent three decades in the Venezuelan oil business and had won international plaudits for overhauling and modernizing the state-run firm since taking over in 1994, would prove to be bad news for PDVSA’s fortunes.

Chávez knew nothing about the oil business and unfortunately those he appointed did not know much more than he did.

In 2002, Chávez took two more steps to turn the once-proud PDVSA into his private preserve. First, he installed a new president, Gastón Parra Luzardo, a leftist economics professor who was a fierce opponent of opening the industry to more private investment. Then, in April, he went on live television to humiliate and fire a handful of PDVSA managers, replacing them with political hacks. Together, the the moves sparked violent public protests, which turned into a coup attempt against Chávez.

Of course the little socialist communist fascist bastard (pick a name) tried to blame everyone else for his countries problems including America.. But the reality is, there was a national oil strike in 2002 by the workers which brought production down to unheard of levels, so his cash cow had quit giving so, he fired managers and something like 18,000 workers.. People who know what they are doing do not grow on trees ...

Using legally questionable methods, he started siphoning off billions of dollars in PDVSA revenue to pay for his social programs, including housing, education, clinics, and school lunches. While this strategy may have paid off politically in the short term, it was extremely dangerous: for the more cash the government took out of PDVSA, the less money the oil company had to invest in maintaining production or finding new resources. Since oil fields gradually produce less oil over time as they get tapped out, countries constantly need to dig new wells and rejuvenate shrinking reservoirs with injections of water or gas. Thanks to their geology, Venezuela’s oil fields have enormous decline rates, meaning the country needs to spend more heavily than other petrostates just to keep production steady. But as Chávez channeled more income into other areas, PDVSA was forced to mortgage the future to pay for the political present

Long article for those who are interested. Certainly not the first time I have heard the same story about Venezuela.. They, you, whoever, can blame anyone you want but Chavez's greed and stupidity gave the country the fatal stab in the heart.

originally posted by: Involutionist

Please elaborate on how their economy functions and how they lacked maintaining infrastructure. Thank you.

Subjective.

No, factual.

The state-run oil company, Petroleos de Venezuela (PDVSA), is struggling to stem a production decline that has accelerated this year as a result of payment delays to suppliers, lack of investment in equipment, and poor planning in the country’s vast oil fields.

www.reuters.com...

"PDVSA is broken for lack of investment, lack of maintenance in all its processes, for years. Now, the crisis is deepening every day," said José Bodas, a union leader at a PDVSA refinery on the northern coast in Puerto La Cruz.

money.cnn.com...

a reply to: xBWOMPx

It isn't. What's weird is you think it is. And I am not for establishing Democracies, they just tend to turn out better. The goal should be to give the power to the people in whatever form that takes.

a reply to: DigginFoTroof

If they want it, then they need to make it happen.

You cannot give it to them. We have tried simply giving these things to people all over the globe and all that happens is that people at home and abroad end up hating you for it.

If they aren't willing to take it and make it happen for themselves, then they really don't want it like they claim they do.

a reply to: Lumenari

So another Socialist experiment gone wrong and it's time to bail them out?

You spelled dictatorship wrong.

a reply to: DigginFoTroof

TLDR

Vice did a piece recently which clearly showed how the inept gov't replaced 5000 workers in the state owned oil company with their "people".

Now they cannot refine any oil to meet the quality of their export contracts... this is why they have the entire problem.

The US companies refuse to buy oil that doesn't meet the contracted quality requirements.

a reply to: grey580

No, it just happens socialism tends to turn into dictatorships.

a reply to: OccamsRazor04

You mean a dictator used socialism to fool the public into getting himself elected. And then just did his dictatorship thing.

It's not that this guy was looking out for the good of the people. He was a dictator from beginning to end.

a reply to: grey580

Ah, the old excuse ...

Socialism didn't fail! They just didn't have the right people running it!

You would think by now that you'd realize that maybe the only person in the world who might be able to actually run something like socialism would be Jesus Christ, and last I checked, He's not due back yet.

originally posted by: SpartanStoic
a reply to: DigginFoTroof

TLDR

Vice did a piece recently which clearly showed how the inept gov't replaced 5000 workers in the state owned oil company with their "people".

Now they cannot refine any oil to meet the quality of their export contracts... this is why they have the entire problem.

The US companies refuse to buy oil that doesn't meet the contracted quality requirements.

I saw that Vice segment and for Vice to cover it and portray it the way it did says something considering they seem to be one of the most liberal news outlets I've seen.

originally posted by: ketsuko
Socialism didn't fail! They just didn't have the right people running it!

TBH I have seen no evidence that the Venezuelan government has been running anything socialist. Plain economic mismanagement and corruption, Yes. Socialism, No.

Anyway, to help Venezuela (as per OP) I am happy to part with some old book on economics from my university days. They are quite high-level, but there are pictures.

a reply to: DigginFoTroof

Not only is the state run operation inept, but while talking about the privately owned oil companies who do know what they're doing you forgot to mention that not only will they not take on oil from Venezuela that isn't up to standards, but they won't move into Venezuela and try to do business which would also help some of the Venezuelans out by providing jobs and by providing some revenue off their resources because the government is prone to arbitrarily and maliciously prosecuting and/or seizing assets whenever it feels like it. So the companies have no assurances of any kind of security on their assets and investments.

a reply to: grey580

Last I checked Chavez won elections. Fair and free elections. So how was he a dictator from day 1?

a reply to: ketsuko

It's not an excuse.

It's what happened.

These countries are dictatorships hiding behind a socialist facade.

a reply to: grey580
Democratic Dictatorships?

a reply to: OccamsRazor04

Really?

The guy tried to take power in the early 90's with a coup and was jailed. Got out. Then after being elected president. Changed the constitution so he could be president for life.

Sounds sorta Dictatory to me.

originally posted by: Isurrender73
a reply to: Lumenari

Still using the word Socialism incorrectly? The people had no ownership or say in production which is not Socialism.

What really happened.

Another Fascist Dictatorship selling their brand of Facism as Socialism failed because the leadership are morons.

Still not understanding the term yourself?

I was going by the definition of it, which if I remember correctly you just say that the dictionary lies and it is something else completely. So why bother talking to someone who doesn't believe that words are what they are actually defined as?

I'm going to type this once and then give up on you.

Marx's Communism? ALWAYS TURNS INTO FASCISM. Because you involve actual people and not a theory on paper.

So to try to just redefine the words to make your argument is just not rational.

Fascism is the natural result of Hegel's theory which Marx plagiarized and tweaked to fit his own preconceptions.

Have a nice day!

originally posted by: OccamsRazor04
a reply to: xBWOMPx

It isn't. What's weird is you think it is. And I am not for establishing Democracies, they just tend to turn out better. The goal should be to give the power to the people in whatever form that takes.

The old republic America started with, was the best system man kind has ever had next to the native americans. Small government, No illegal taxes, people owned there land and property and the government could not take that from them. The people controlled the credit until 1914 and for a 100 years prior to 1914, there was just about zero inflation. Anyway, I can go on for awhile about why a small simple system and power to the people is better then a government controlling everything, but i wont.

originally posted by: OccamsRazor04
a reply to: grey580

Last I checked Chavez won elections. Fair and free elections. So how was he a dictator from day 1?

Your right, Chavez did win, the people backed him up. Our government tried to buy him tried to kill him, they even tried to get the people to start a revolt and paid them but they would not. He did get elected, I do remember that during the Bush era, I was in the Army and we were wondering if we were gonna end up in Venezuela next after being in Iraq. Anyway, their country fell flat on it's face and busted all of it's teeth out and is scraping by, but that's what happens when you get into a socialist country the promises to provide all of these services but fails because people take more then they put in. The governments of the world knows this and do this on purpose, there are just too many morons living in la la land thinking it'll work in their country when it has failed miserably every where else and have taken away rights and freedoms to control the population. Im good though, the world can keep their democratic socialism...

a reply to: grey580

People voted for him though.

Just because they were stupid doesn't make the election less valid. You can try to scrape that inconvenient truth under the rug all you want, but there it is.