The plunging oil prices over the past few months have brought to light a failing of socialism that Hugo Chavez is now having to deal with.  When he was awash in oil revenues, he could afford to give it away and pretend that his utopia was working, and the inefficiencies could be smoothed over.  However, reality set in, and he had his hat in hand, returning to the evil capitalists for what might be called a bailout.

President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials here have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

It’s like that whole idea of government control isn’t working out for them.  Odd, that.

Filed under: DougEconomics & TaxesGovernmentVenezuela

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