Venezuelan Governmental Action - Chavez Term Paper

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5 million barrels per day, PDVSA engineers are reported to have "goose" wells by pumping in air and water into them to cajole the viscous petroleum to the surface, which has endangered the long -term sustainability of these existing oil fields.

The information technology company, which was jointly owned, by PDVSA and the U.S.-based Science Applications International Corporation (SAIC) was apprehended by the Venezuelan military during the national strike in December 2002.

Chavez said his government may sell eight U.S. refineries as part of a strategy by the world's fifth-largest supplier of oil to reduce dependency on sales to the U.S."

Venezuela's Chavez Considers Sale of Refineries)

His attitude towards the press is not only condescending but he has also curtailed its freedom. He has coerced the T.V channels and radio stations into broadcasting his speeches without leaving fair time for the opponents.

He has his eyes set on the upcoming elections of 2006 and has taken it upon himself to ensure that his position remains secure as the president of Venezuela. In order to gain the sympathies of the poor people of Venezuela who constitute about 80% of its population "Chavez has allocated $1.6 billion to $3.7 billion worth of state oil income which would be spent on the poor voters during the campaign.

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In order to enforce his 2001 Hydrocarbon law he altered the 60-year-old agreement with the foreign oil companies, increased royalties and enforced heavy taxes.

Venezuela has not been the one to benefit from his decision to cripple the PDVSA under the pretext of providing the poor with the investment meant for expanding PDVSA and maximizing revenues by boosting export volumes. Saudi Arabia and Russia have benefited the most from this situation, as PDVSA no longer poses any threat to either of them. Chavez has foolishly relied on OPEC production controls to regulate the oil prices. This strategy of his failed miserably for if it hadn't he wouldn't have put up a proposal for a higher OPEC price band.

PDVSA has suffered a loss of nearly 1.5 million bpd of crude production capacity because Chavez axed investments required to keep the existing capacity so that the government could use PDVSA's capital reserves for non-oil expenditures.

CONCLUSION:

Hugo Chavez's vision of utopia can lead Venezuela's economy into a terrible crisis, ending in further unemployment and poverty since the country's major earning is through oil production which itself faces upheaval, not to mention the overburdening of economies of America and the world......

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