More Oil News

The latest news regarding crude comes from Venezuela. It is no secret that Hugo Chavez, the president of Venezuela, is not the biggest fan of the U.S. of A.

If it wasn't scary enough that Chavez said he was going to export less oil to the U.S. and more oil to China, he had some more plans for local oil interests. He has plans to take over oil projects in the Orinoco River Basin next month (Ledger-Enquirer).

Guess who owns the majority of projects located in that particular basin. How about Exxon Mobile, BP, Conocophillips, BP PLC, Chevron Corp., France's Total SA, and Norway's Statoil ASA. Chavez has announced that government officials accompanies by armed guards will assist in the takeover.

Chavez said that he will be taking a minimum 60% majority ownership in these companies. He did say that he would be happy if the original companies would assume a minority ownership. All I can say is "ouch." I will be interested to see what the U.S. reaction to this move is.

On another quick note. OPEC has taken 1.2 million barrels a day of production off the market since last September (Telegraph UK). I don't want to focus on the fact that OPEC is manipulating the market. In fact, I don't think this has anything to do with it. I believe that OPEC no longer has the ability to produce oil as it used to. Some of the major oil fields, such as Gwahar, are declining in production. I believe this production "cut" is not desired by OPEC, but instead is forced upon them through peak oil.