Mother Jones - Comments for "Going Back for More"

Brenden, would it be fair to say that this might be driven by tax rules for executive pay? Share option schemes have become common, leaving performance rewards tied to the company share price. Which of course drives short term thinking in spades.

This leaves company boards all but being told what to do by the market's financial analysts who don't really have any interest in the long term stability of the company.

Companies need to go back to offering their shares as dividend stocks, not growth stocks. Then they would be in the long term steady growth part of the financial market, not the volatile get rich quick part. This would encourage long term company growth policies within the companies (options on dividend stocks are far less attractive as a compensation tool).

btw if i were Venezuelan i would vote against the amendment. I think term limits in Latin America for the time being are probably a very good thing.

"...in his attempt to become president for life..."

so then the elimination of term limits equals president for life? No wonder Franken and Coleman are fighting so hard - they get to be senators for life!!

This has nothing to do with my opinion of Chavez. That would be a different question. Fact challenged comments like that, however, belong on the right side of the blogosphere.

Maybe the consequences of peak oil on the whole industry scare them a lot more than the prospect of a bit of nationalization in one country. Plus, it gets them another foot in the door so they can try to gain more influence in Venezuela and hire someone to dissappear Chavez.

If we would only drill, baby, drill right here in the good ole US of A, the oil companies wouldn't be dealing with Hugo Chavez.

/wingnut

"I suppose the companies who are bidding on the Orinoco projects may be counting on Chávez failing in his attempt to become president for life, and are thus figuring they won't have to deal with him in the long term"
Virtually no one in business is thinking of the long term anymore. or, put otherwise, 'long-term' has come to mean anything further out than 5 or 6 quarters.
The execs at public companies nowadays cannot survive more than a quarter or two or three of their competitors doing better than they do. if they get 8 or 12 quarters (2 or 3 years) of great results out of Vz. or any other investment they will be hailed as geniuses and will have long since negotiated a glittering golden parachute for themselves if in the 'long term'--3 or 5 years from now--it all blows up.
this is the way business is done now. i don't offer this as criticism or sarcasm, although i am personally not impressed by the extreme discount on the theory and practice of sustainability this model implies (or even requires). I am just trying to describe clearly what i see as common practice in the major public and private companies i do business with or come across.
there are some exceptions, and energy companies used to be among these--making major R and D investments, negotiating leases against a 20 or even 50 year price/depletion horizon, and so on. But this becomes less and less common or even acceptable as these firms find themselves competing for the same share buyers (especially the big institutional investors like Calpers or other pension funds, Harvard, etc.) as are all other public companies.
so, they'll go in, take a chance with Hugo, make a killing (and try to screw him in the deal made to ensure that there is indeed a quick killing there), and then in a few years when he turns the knife on them they will be well into whatever the next attractive 'play' is.
or perhaps they'll be in prison by then on some unrelated scam. but at any rate, they certainly aren't making decisions now based on how they will play out over the next 20 or so years. business just isn't done that way now, if it ever was.

Peak oil isn't the only reason that US oil companies are desperate for projects. Due to rising anti-Americanism they have been systematically shut out of new developments all over the world. Seems like the shoe is finally getting on the other foot; the American oil companies have been used to taking advantage of other countries, and now other countries are taking advantage of them. Too bad. :)

Of course, Chavez's hypocrisy is getting out of hand. He condemns Israel for war crimes, and wants a boycott of them, and yet he apparently has no trouble with US war crimes in Iraq, not to mention American arms sales to Israel.

Maynard, yes and no.

"And as the Times points out, oil companies are pretty desperate for projects these days since there just aren't many big new fields left to open up."

Are they willing to admit this in public? Or is peak oil still the crazy theory of various leftist hippie types?

Halliburton has a different business model, they just provide services, and don't take ownership of any production. They are probably less exposed to the capriciousness of politicians, since they don't have large capital infrastructure tied up in the field. Also the fact that they don't own any of the oil, makes them more trusted, they aren't likely to try to get the CIA to overthrow the government.

But, for the others, assuming they are making long term investments, not just providing ongoing services, it seems way to risky to me.

All I can think of is the Bluth Company, and how naive we all were to think it was satire:

Michael: [discussing evidence that links George Sr. to Saddam Hussein] If this information was so damaging, why didn't you just shred it?
George Sr.: Well, Saddam owed us money.
Michael: And you didn't realize that he wouldn't pay?
George Sr.: Your mom had a good feeling about him.

I suppose the companies who are bidding on the Orinoco projects may be counting on Chávez failing in his attempt to become president for life, and are thus figuring they won't have to deal with him in the long term.

Yeah, those democratically elected presidents are so much harder to deal with than the Arab sheiks.

It's like a parasite or a chess program. There's no long term strategy, just the best move in the momentary circumstances, each moment unrelated to the next or the future.
I appreciate the point you're trying to make, Alan, but a chess program that only makes the best moves in the moment, without regard to the long term consequences of that move would be a pretty poor chess program.

The oil companies made lots of money in Venezuela before nationalization. They will make more money in future if allowed back in. The oil companies may not be able to recreate their national political dominating oligarchy in Venezuela, which is what the NYT's editors lament.

Chávez is a human being and will die someday. It is far better for them to have any kind of presence there than none at all.

What you and Dan fail to note in your posts is this portion of the article:

Petróleos de Venezuela let private companies remain as minority partners after the nationalizations, despite Mr. Chávez's often aggressive anticapitalist stance.

Moreover, foreign oil services companies like Halliburton, which has done business in Venezuela for 70 years, have even expanded their activities in the country as Petróleos de Venezuela grew more dependent on contractors to help extract oil from aging wells.

There's money to be made there. They'll jump on board to make it.