weisbrot on bolivia:
Morales had promised to regain control over the country's hydrocarbon - mostly natural gas - resources. This was accomplished and has brought in an extra $1.5 billion of revenue to the public treasury. (For comparison, imagine an extra $1.6 trillion, or four times the current U.S. federal budget deficit, in the United States.)
(...) These provinces produce about 82 percent of Bolivia's natural gas, and get nearly three times the gas revenue per person as do the other five provinces. The Media Luna states have a per capita income that is about 40 percent higher than the other five states. Their population is also much less indigenous: ranging from 16 percent (Pando) to 38 percent in Santa Cruz, as compared to 66-84 percent in the other states.
(...) The Media Luna states also have the big landholdings that give Bolivia one of the most concentrated land distributions in the entire world. Well under one percent of landowners have two-thirds of the country's farm land. These include the big soybean producers of Santa Cruz, Bolivia's largest province and bulwark of the Media Luna alliance. Some of the big landowners are leaders of the political opposition.
(...) With forty percent of the labor force in agriculture and more than three-quarters of rural Bolivians in poverty, a redistribution of arable land is not only a central demand of the voters, but an important part of an economic development strategy that can boost employment and income in the countryside.

oil and america:
One could date it back to 1980 when President Jimmy Carter -- before his Habitat for Humanity days -- declared that Persian Gulf oil was "vital" to American national interests. So vital was it, he announced, that the U.S. would use "any means necessary, including military force" to sustain access to it"
(...) Or we could date it all the way back to World War II, when British officials declared Middle Eastern oil "a vital prize for any power interested in world influence or domination," and U.S. officials seconded the thought, calling it "a stupendous source of strategic power and one of the greatest material prizes in world history."
(...) We know, for example, that, before and after he ascended to the Vice-Presidency, Dick Cheney has had his eye squarely on the prize. In 1999, for example, he told the Institute of Petroleum Engineers that, when it came to satisfying the exploding demand for oil, "the Middle East, with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies." The mysterious Energy Task Force he headed on taking office in 2001 eschewed conservation or developing alternative sources as the main response to any impending energy crisis, preferring instead to make the Middle East "a primary focus of U.S. international energy policy." As part of this focus, the Task Force recommended that the administration put its energy, so to speak, into convincing Middle Eastern countries "to open up areas of their energy sectors to foreign investment" -- in other words, into a policy of reversing 25 years of state control over the petroleum industry in the region.
(...) In 2002, just a year after Cheney's Task Force completed its work, and before the U.S. had officially decided to invade Iraq, the State Department "established a working group on oil and energy," as part of its "Future of Iraq" project. It brought together influential Iraqi exiles, U.S. government officials, and international consultants. Later, several Iraqi members of the group became part of the Iraqi government. The result of the project's work was a "draft framework for Iraq's oil policy" that would form the foundation for the energy policy now being considered by the Iraqi Parliament.
(...) Indeed, Iraq could someday become the most important source of petrochemical energy on the planet. According to the U.S. Energy Information Administration, Iraq possesses 115 billion barrels of proven oil reserves, third largest in the world (after Saudi Arabia and Iran). About two-thirds of its known oil reserves are located in Shia southern Iraq, and the final third in Kurdish northern Iraq. However, in energy terms, only about 10% of the country has actually been explored and there is good reason to believe that modern methods -- which have not been applied since the beginning of the Iraq-Iran War in 1980 -- might well uncover magnitudes more oil. Estimates of the possible new finds offered by officials of various interested governments range from 45 billion to 214 billion additional barrels, depending on the source; but some non-governmental experts see the final treasure exceeding 400 billion barrels. If the latter figure is correct, then Iraq would likely become the world's largest source of oil.
(...) Moreover, both its current fields and many of the potential new discoveries would be extremely cheap to access, if security weren't such a problem today in Iraq. James Paul of the international policy monitoring group, the Global Policy Forum, offers this positive view: "According to Oil and Gas Journal, Western oil companies estimate that they can produce a barrel of Iraqi oil for less than $1.50 and possibly as little as $1.... This is similar to production costs in Saudi Arabia and lower than virtually any other country."
(...) Knowledge of this level of underproduction was certainly one factor in Deputy Secretary of Defense Paul Wolfowitz's pre-war prediction that the administration's invasion and occupation of Iraq would pay for itself; he hoped for a quick postwar increase in production to 3.5 million barrels per day or, at the $30 per barrel price of oil at that time, close to $40 billion per year in revenues. An expected expansion in production levels (once the oil giants were brought into the mix) to perhaps 6.5 million barrels, through the development of new oil fields or more efficient exploitation of existing fields, had the potential to more than cover the expected American short-term military costs and leave the new Iraqi government flush as well.
(...) Paul Bremer, the new head of the American occupation, promulgated a series of laws designed, among other things, to kick-start the development of Iraqi oil. In addition to attempting to transfer management of existing oil facilities (well heads, refineries, pipelines, and shipping) to multinational corporations, he also set about creating an oil-policy framework, unique in the region, that would allow the major companies to develop the country's proven reserves and even to begin drilling new wells.
(...) [resistance to these plans] All these plans were, however, quickly frustrated, both by the growing Sunni insurgency and by civil resistance. Iraq's oil workers quickly unionized -- even though Bremer extended Saddam's prohibition on unions in state-owned companies -- and effectively resisted the transfer of management duties to foreign companies. In one noteworthy moment, the oil workers actually refused to take orders from Bechtel officials in the oil hub of Basra, thus preserving their own jobs as well as the right of the Iraqi state-owned Southern Oil Company to continue to control the operation in that region. Bechtel's management contract was subsequently voided. At the same time, the growing insurgency, acting on a general Iraqi understanding that a major goal of the occupation was to "steal" Iraqi oil, systematically began to attack the oil pipelines that traveled through the Sunni areas of the country. Within a few months, all oil exports in the northern part of Iraq were interrupted -- and the northern export pipelines have remained generally unusable ever since.
(...) To resistance of various sorts must be added the "contribution" of the major American corporations involved in "reconstructing" Iraq, notably Halliburton and Bechtel. These crony corporations, with close ties to the Bush administration, accepted huge fees to rehabilitate dilapidated or damaged oil facilities. Almost without fail, they chose not to repair existing plants locally or to employ the raft of skilled Iraqi technicians who had used remarkable ingenuity in maintaining these facilities during a dozen years of UN sanctions. Working under cost-plus agreements that guaranteed a fixed profit rate no matter how much an operation ultimately cost, they preferred instead to install expensive new proprietary equipment. Then, in the absence of any outside oversight, they ran up huge expenses and frequently failed to complete their contracts, leaving the oil facilities they were servicing in states of disrepair or partial repair -- and equipped with technology that local technicians could not service.
(...) hen technical sovereignty was finally handed over to an appointed Iraqi government headed by the CIA's favorite Iraqi exile, Iyad Allawi, in June 2004, the new premier embraced Bremer's policy, but to no avail. The international oil companies were no more impressed with his future than they had been with Bremer's. Like Wolfowitz, they knew that Iraq "floats on a sea of oil"; unlike him, they were no dreamers. They weren't willing to risk their capital in the dangerous and legally ambiguous circumstances then prevailing. As a result, the first two years of Bush administration efforts to "access" Iraqi oil failed -- and dismally so at that. Average production never exceeded the bottom-of-the-barrel 2.5 million barrels Saddam's regime managed to extract on its worst days. By 2006, production had slipped below 2 million barrels per day.
(...) The State Department planners had concluded that Production Sharing Agreements -- a method that granted multinational oil companies effective control of oil fields without transferring permanent ownership to them -- would be the basic instrument through which a future "independent" Iraq would develop new oil fields. Wary by now of being seen as the chief advocate of this policy, which it so desperately wanted in place, the Bush administration concocted a strategy that would enlist the international community in pressuring Iraq to adopt its program. This was done by making the International Monetary Fund (IMF) a key player in Iraqi oil policy. Through loans in the 1980s and reparations imposed for his invasion of Kuwait in 1990, Saddam had accumulated $120 billion in external debt, the largest per capita debt in the world and a potentially insurmountable obstacle to economic recovery, even in oil-rich Iraq. One option available to the new government was to declare this debt "odious," a technical term in international law referring to debt accumulated by authoritarian rulers for their own personal or political aggrandizement.
(...) Saddam's expansionist war against Iran, his use of public funds to build ostentatious monuments and palaces, his transfer of billions to his personal accounts, and his failure to maintain the infrastructure of the country all were excellent evidence that the debt was indeed odious; and the U.S. claimed as much for almost $40 billion of it, held by 19 industrialized countries known as the Paris Club. Instead of seeking to cancel this debt (and the remaining $80 billion) entirely, however, the Bush administration sent James Baker, former Secretary of State under George H. W. Bush, to the Paris Club to negotiate conditional forgiveness. The resulting agreement immediately forgave $12 billion, but left $28 billion on the books. A second $12 billion would be abrogated when the Iraqi government signed onto "a standard International Monetary Fund program," and a further $8 billion three years later, after the IMF confirmed Iraqi compliance. Even if "successful," almost $8 billion would still be outstanding to the Paris Club -- together with $80 billion not covered by the agreement.
(...) The "standard International Monetary Fund program," not surprisingly, included the now familiar American policies regarding Iraqi oil, as well as the use of Profit Sharing Agreements and a host of other provisions that would open the Iraqi economy as a whole, and the oil sector in particular, to investment by multinational corporations. Among the most punitive of the provisions was a demand for an end to the economic breadbasket that guaranteed all Iraqi families low prices for fuel and food staples. In a country with, by 2005, somewhere between 30% and 70% unemployment, average wage levels under $100 per month, and escalating inflation, these Saddam-era subsidies meant the difference between basic subsistence and disaster for a large proportion of Iraqis.
(...) Zaid Al-Ali, an international lawyer working on development issues in Iraq, described the agreement as a "perfect illustration of how the industrialized world has used debt as a tool to force developing nations to surrender sovereignty over their economies."
(...) The newly elected Iraqi National Assembly promptly denounced this agreement as "a new crime committed by the creditors who financed Saddam's oppression." This forceful expression reflected the opinions of the Assembly's constituents. After all, 76% of Iraqis believed that the main reason for the Bush administration's invasion was "to control Iraqi oil."
(...) The U.S. then began pressuring the Iraqi government to draft a definitive petrochemical law that would conform to the IMF guidelines. Given the levels of resistance to the very idea, this work was conducted in secret and took until the end of 2006 to complete. As independent journalist Joshua Holland described the process: "Just months after the Iraqis elected their first constitutional government, USAID sent a BearingPoint adviser to provide the Iraqi Oil Ministry 'legal and regulatory advice in drafting the framework of petroleum and other energy-related legislation, including foreign investment'.... The Iraqi Parliament had not yet seen a draft of the oil law as of July [2006], but by that time... it had already been reviewed and commented on by U.S. Energy Secretary Sam Bodman, who also 'arranged for Dr. Al-Shahristani to meet with nine major oil companies -- including Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips -- for them to comment on the draft.'"
(...) When the "Draft Hydrocarbon Law" was finally delivered to the Iraqi Parliament on February 18, 2007, key provisions had already been leaked and immediately denounced by the full spectrum of the Iraqi opposition. Taking turns registering dismay were the majority of the Parliament, a wide range of government officials, the leadership of major Sunni political parties, the union of oil workers, the Sadrists -- the most powerful Shia grouping -- and the visible leadership of the insurgency. All this led to many changes in the law, including the removal of all mention of either privatization or Production Sharing Contracts, which would have given multinational oil companies 15-25 years of basically unregulated operational control over Iraqi oil facilities. The amended version in no way excluded the use of PSAs, but it removed the explosive designation from the actual wording of the law.
(...) [PSA´s]Production sharing agreements are generally applied in circumstances where there is a strong possibility that oil exploration will be extremely costly or even fail, and/or where extraction is likely to prove prohibitively expensive. To offset huge and risky investments, the contracting company is guaranteed a proportion of the profits, if and when oil is extracted and sold. In the most common of these agreements, the proportion remains very high until all development costs are amortized, allowing the investing company to recoup its investment expenditures (if oil is found), and then to be rewarded with a larger-than-normal profit margin for the remainder of the contract which, in the Iraqi case, could extend for up to 25 years. None of these conditions apply in Iraq: huge reservoirs of easily accessible oil are already proven to exist, with more equally accessible fields likely to be discovered with little expense. This is why none of Iraq's neighbors utilize PSAs. Saudi Arabia, Kuwait, Iran, and the United Arab Emirates all pay the multinationals a fixed rate to explore and develop their fields; and all of the profits become state revenues.
(...)The advocates of PSAs in Iraq justify their use by arguing that $20 billion would be needed to develop the Iraqi fields fully and that favorable PSAs are the only way to attract such heavy doses of finance capital under the current highly dangerous circumstances. This assertion seems, however, to be little more than a smokescreen. No major oil companies are willing to invest in Iraq now, no matter how sweet the deal. If order is restored, on the other hand, Iraq would have no trouble attracting vast amounts of finance capital to develop reserves that could well be worth in excess of $10 trillion and hence would have no need whatsoever for PSAs.
(...) Based on leaked information, journalists reported that the PSAs envisioned by the Iraqi petrochemical law contained extremely favorable provisions for the oil companies, in which they would be entitled to 70% of profits until development expenses were amortized and 20% afterwards. This would have guaranteed them at least twice the typical profit margin over the long run and many times that figure during the initial years.
(...) There are other elements in the law (and the possible PSA contracts) that have also roused resistance inside Iraq. Among the most controversial:
· Insofar as PSAs or their legal equivalent were enacted, Iraq would lose control over what levels of oil the country produced with the potential to substantially weaken the grip of OPEC on the oil market.
· The law would allow the oil companies to fully repatriate all profits from oil sales, almost insuring that the proceeds would not be reinvested in the Iraqi economy.
· The Iraqi government would not have control over oil company operations inside Iraq. Any disputes would be referred instead to pro-industry international arbitration panels.
· Contacting companies would not be obliged to hire Iraqi workers, and could pursue the current policy of employing American technicians and South Asian manual laborers.
· No contracts would be public documents.
(...) Several African countries with vast mineral riches have been subjected to these sorts of conditions, with large multinational companies extracting both minerals and profits while returning only a tiny fraction of the proceeds to the local population. As the resources are taken out of the ground and the country, the local population actually becomes poorer, while the potential for future prosperity is drained.
(...) [prospects for resistance]The Parliament itself may be the first line of defense. It challenged the original IMF agreement and has refused to consider the bill for two months, already missing a March deadline for passage that American politicians of both parties had pronounced an important "benchmark" by which to judge the viability of Prime Minister Nouri al-Maliki's government.
(...) Rafiq Latta, a London-based oil analyst, told Nation reporter Christian Parenti, "The whole culture of the ministry opposes [the law].... Those guys ran the industry very well all through the years of sanctions. It was an impressive job, and they take pride in 'their' oil."
(...) Perhaps most formidable of all is the Federation of Oil Unions, with 26,000 members and allies throughout organized labor. The oil workers overturned contracts in 2003 and 2004 that would have placed substantial oil facilities under multinational corporate control; and they initiated a vigorous campaign against the U.S. sponsored oil program as early as June 2005 -- calling a conference to oppose privatization attended by "workers, academics, and international civil-society groups." In January 2006, they convened a convention composed of all major Iraqi union groups in Amman, Jordan, which issued a manifesto opposing the entire neo-liberal U.S. program for Iraq, including any compromise on national control of oil production.
(...) Iraq's trade unions, speaking in a single voice, declared that: "Iraqi public opinion strongly opposes the handing of authority and control over the oil to foreign companies, that aim to make big profits at the expense of the people. They aim to rob Iraq's national wealth by virtue of unfair, long term oil contracts that undermine the sovereignty of the State and the dignity of the Iraqi people."
(...) He [union leader] then called on the government to consult Iraqi oil experts (who had not participated in drafting the law) and "ask their opinion before sinking Iraq into an ocean of dark injustice."
(...) Finally -- and no small matter -- the armed resistance is also against the oil law. The Sunni insurgency underscored its opposition by assassinating Vice President Adel Abdul Mahdi, a major advocate of the pending law, on the day the bill was made public. The significance of the opposition of the Sunni insurgency is amplified by the stance of the Sadrists, the most rebellious segment of the Shia majority. Sadr spokesman Sheikh Gahaith Al Temimi warned journalist Christian Parenti that while the Sadrists would "welcome" foreign investment in oil, they would do so only "under certain conditions. We want our oil to be developed, not stolen. If a bad law were to be passed, all people of Iraq would resist it."
(...) Active opposition by the Parliament alone, or by the unions alone, or by the Sunni insurgency alone, or by the Sadrists alone might be sufficient to defeat or disable the law. The possibility that such disparate groups might find unity around this issue, mobilizing both the government bureaucracy and overwhelming public opinion to their cause, holds a much greater threat: the possibility of creating a unified force that might push beyond the oil law to a more general opposition to the American occupation.
(...) he likelihood that any future Iraqi government which takes on a nationalist mantel will consider such an agreement in any way binding is nil. One day in perhaps the not so distant future, that "law," even if briefly the law of the land, is likely to find itself in the dustbin of history, along with Saddam's various oil deals. As a result, the Bush administration's "capture of new and existing oil and gas fields" is likely to end as a predictable fiasco.

chavez and oil:
The Times went on to claim this action would undermine Venezuela's growth hinting Big Oil's threat to leave might get Chavez to back down enough to get them to stay. It never happened as this writer suggested April 12 in an article titled "Wall Street Journal and New York Times Attack journalism." The article made it clear oil exploration and production in Venezuela is so profitable that even with a smaller share of the profits US, European and other Big Oil investors wouldn't dream of leaving. Whine plenty, leave, not likely, and now we know they won't.
(...) Hugo Chavez, in fact, is a self-proclaimed social democrat charting his own independent course toward progressive "21st century socialism" along the lines Latin American expert James Petras calls the "pragmatic left" in contrast to the more "radical left" of Colombia's FARC guerrillas; elements of "teachers and peasant-indigenous movements in Oaxaca, Guerrero and Chiapas in Mexico;" many "small Marxist groups in Argentina, Bolivia, Chile and elsewhere;" and Venezuela's "peasant and barrio movements," among others. Other Latin American leaders Petras calls "pragmatic" leftists include Bolivia's Evo Morales, Cuba's Castro and many "large electoral parties and major peasant and trade unions in Central and South America" including Mexico's PRD party, El Salvador's FMLN, Chile's Communist Party, "the majority in Peruvian (Ollanta) Humala's parliamentary party;" and others including "the great majority of left Latin American intellectuals."
(...) Hugo Chavez offers them a new choice having announced in March he intends creating a Bank of the South social democratic alternative to the repressive neoliberal Washington Consensus IMF-World Bank model. So far Bolivia and Argentina have agreed to be part of it with Chavez hoping other Latin countries will join as well by contributing 10% of their capital reserves for this enterprise he hopes will be operating by summer.
(...) Additional parts of Chavez's plan involve forging stronger ties to other oil importing nations like China to reduce Venezuela's dependency on a hostile US. He also announced April 29 the nation hopes to gradually sell its seven US-based Citgo refineries replacing them with a new Latin American-based network in Bolivia, Ecuador, Nicaragua, Haiti and Dominica. It's part of his plan to provide the region a stable oil supply and 100% of the energy needs for Alternative for the Americas (ALBA) members and Haiti.
(...) Further, Journal writers take aim at PDVSA demeaning it as a state-run company claiming it has "little focus" because Chavez turned it into a "poverty-alleviation ministry." As a result, the Journal says it became inefficient and its production fell from 3.1 million barrels a day when Chavez first took office in 1999 to 2.4 million barrels a day now according to US government Energy Information Administration (EIA) figures that look to have been cooked to bring them down. They're disputable with differing ones coming from alternate sources including the 2006 CIA World Factbook listing Venezuela's daily production at slightly under 3.1 million daily barrels, around the same figure PDVSA reported then including extra-heavy crude from Orinoco belt production. In May, 2006, Venezuelan Minister of Petroleum and Energy, Raphael Ramirez indicated the International Energy Agency (IEA) recognized the nation's daily oil production at over 3 million daily barrels while the government reports it now at 3.3 million compared to 2.6 million or less claimed by international oil analysts and EIA deliberately understating oil output the way Washington and the West distort everything positive about Venezuela under Hugo Chavez.
(...) All it can say, with a heavy-handed dose of sour grapes, is that "Mixing oil and politics may not help Mr. Chavez in the long run" as he'll need "private companies' expertise to develop the heavy crude in the Orinoco region" without ever conceding he already has it and a long line of takers ready to step in if any now there foolishly leave. They won't, but don't expect to see that opinion reported anywhere in the Wall Street Journal as they'd then have to admit everything they wrote earlier was false and misleading. They don't have to. You just read it here.

nationalizing oil in venezuela:
Newly bought Russian-made fighter jets streaked through the sky as Chavez shouted "Down with the U.S. empire!" to thousands of red-clad oil workers in the Orinoco River Basin, calling the state takeover a historic victory for Venezuela after years of U.S.-backed corporate exploitation.
(...) Chavez accused foreign oil companies of bad drilling practices due to their hunger for quick profits, and said Venezuela could sue them for causing lasting damage to oil fields.
(...) [however] The companies have leverage with Chavez because experts agree that Venezuela's state oil company, Petroleos de Venezuela SA, cannot transform the Orinoco's tar-like crude into marketable oil without their investment and experience.
(...) Nationalization of the oil industry has been tried in Venezuela before, though with a different tack. Venezuela shut companies out of the oil sector completely between 1976 and 1992 before beginning a series of partial privatizations, which Chavez is now rolling back. Chavez is also nationalizing electricity companies and the country's biggest telecommunications company, and has threatened to take over private hospitals if they continue raising prices for care. He says radical changes are needed to help the poor.
(...) [and the brilliant minds at the state department:] "I think he's digging a hole for the Venezuelan people," McCormack told reporters in Washington. "You can't take the shovel out of the man's hand. He just keeps on digging. And sadly, it's the Venezuelan people who are victimized by this."

morales en bolivia, un resumen:
La nacionalización de hidrocarburos fue el acto más popular de su primer año de gestión. Según los nuevos contratos, el gobierno recibirá 82 por ciento de ingresos de gas, una subida de $240 millones a $1.6 mil millones. Pero la nacionalización solamente se trata de recursos del subsuelo, dejando las refinerías en las manos de las empresas extranjeras que mantienen derechos exclusivos a explorar y explotar las reservas de gas.
(...) El gobierno ha procurado usar las vías legales para implementar las nacionalizaciones y otras reformas. No obstante, la derecha no está interesada en hacer acuerdos, porque no quiere reforma ninguna, por moderada que sea. Los partidos de la derecha bloquearon avance en la asamblea constituyente hasta la última semana de febrero, insistiendo que cada artículo fuera aprobado por dos-tercios. El MAS hizo una concesión que da un veto efectivo a la minoría derechista.
(...) El MAS, lamentablemente, cree que el enfrentamiento con la derecha le hará más audaz. Pero las concesiones del gobierno han provisto un espacio a la derecha para organizarse y cobrar intensidad. Al mismo tiempo han desmovilizado la base que podría defender al gobierno.
(...) Como dijo Eusebio Merlo, un dirigente de la Federación de Juntas Vecinales en El Alto (FEJUVE), “Sabemos que la lucha es larga. No acaba con Evo Morales--la lucha sigue. Continúa--es un proceso. Entonces, nosotros como dirigentes tanto decimos, escuchamos a las regiones, a sus pensamientos, que son distintos, pero quieren un cambio profundo. Queremos que realmente los originarios aprendamos a administrar los recursos naturales, y aprendamos a dirigir nuestro país. Esta es la visión de nosotros, esta es la visión de los vecinos, esta es la visión de los líderes”.

i wonder how this sounds to CEO's (maybe they'll cry 'private property'?):
"On May 1 we are going to take control of the oil fields," Chavez said. "I'm sure no transnational company is going to draw a shotgun, but we will go with the armed forces and the people."