Tuesday, May 12, 2009

Hugo Chavez: "To the People What is the People's"

Over the weekend Venezuelan troops in combination with PDVSA, the country's state-owned oil firm, seized the assets of more than 50 oil service companies operating in Venezuela.

In marking the occasion, President Hugo Chavez announced, "To God what is God's, and to Caesar what is Caesar's," adding, "Today we also say: to the people, what is the people's," the Financial Times ("Caesar Chavez Drives Campaign of Oil Seizures," May 11, 2009) has reported.

The FT reported that the "surprise move" was a result of the service companies' threat to suspend work until they were paid.

The larger issue is what this latest development means in the context of the willingness of foreign companies to invest in the oil and gas rich Latin American country. David Voght, managing director of oil and gas consultancy IPD Latin America, told the FT, "Venezuela's aggressive fiscal terms and the country's trend toward nationalization of oil industry activities will make it more difficult to attract foreign investment and competitive bids from qualified operators."

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