Did Chavez become China’s sap?
posted at 12:05 pm on July 28, 2008 by Ed Morrissey
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Hugo Chavez has tried to maneuver the US to the sidelines in South America, and he saw China as an ally in those efforts. Venezuela has limited options for refining its highly-sulfurous crude oil; almost all of the refineries designed to handle it are in the US. Chavez bought millions of dollars of upgraded oil-production equipment from China in return for a commitment to build a new refinery in China to handle Venezuelan crude, but industry analysts think China just played Chavez for a sap:
A little-noticed piece of news: A few weeks ago, Venezuela announced an agreement with PetroChina to build a large refinery in Guangdong Province capable of refining Venezuela’s unique, heavy oil.
At first glance that looks like very bad news for the United States. Right now, Venezuela refines nearly all of its oil in the United States, about 1.2 million barrels a day, and then sells it here. What would happen if, one day down the road, Venezuela simply cut off the supply? At the least, that would cause severe market disruptions, leading to a large jump in the price of gas. …
In May, Venezuela and China announced a “preliminary agreement” to build a massive new refinery on Gaolin Island in the southern province of Guandong. They agreed to split the cost and ownership.
Since then, American oil experts and Latin America scholars have been debating the refinery deal, and a curious consensus has developed. Nobody seems to believe China will actually build it.
Why not? For one thing, China’s second largest trading partner is the US. While the two nations have opposing long-term strategic interests, both nations want the trading relationship to remain strong. Beijing doesn’t have the expansionist political desires that fuels Chavez’ fantasies, and they don’t need to antagonize the US in order to expand trade. They have tread carefully in South America, and they understand that actually building such a refinery would send red flags up in Washington DC.
Also, the Chinese have no need for such refineries. They can buy oil on the global market in sufficient quantities without spending more to refine Venezuelan crude. Why go to all that expense to provoke the US into a trade war that will damage China a lot more than the US, just to get its hands on oil that costs more to refine and to ship than what China already can get for itself now?
China wanted to make a deal for equipment and services with Chavez, exploiting an opening which Chavez’ nationalization of the oil industry has provided. His regime has proven inept at production, and he needs experts to right the ship at PDVSA. In order to get that business, Chavez has apparently demanded that his partners help diversify the refining capacity for Venezuelan crude. China made the promise to get the business, but has no real intention of honoring the commitment.
Chavez probably already knows this. At this point, he needs as much propaganda material as he can acquire, and just blustering about the refineries is sufficient. His agreement shows his desperation with falling oil production since he nationalized his one major export market.
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Stooge is a better word, I think.
Dr.Cwac.Cwac on July 28, 2008 at 12:10 PM
I love the smell of sulfur in the morning. Smells like victory.
Akzed on July 28, 2008 at 12:13 PM
Chavez has another chip he could play.
There was a blip on the news item that Chavez is shopping around for military/weapon build-up. The Venezuelan strongman can tie the weapons deal (actual money payoff) to the refinery.
Sir Napsalot on July 28, 2008 at 12:15 PM
calling chavez a stooge is an insult to the 3 stooges!!!
right4life on July 28, 2008 at 12:15 PM
Hugo Chavez is the type of buffoonish assclown South American dictator who would be right at home as the hapless villain in a typical Three Stooges theatrical short film. To paraphrase the words of the immortal Moe Howard, Chavez’s a knucklehead.
pilamaye on July 28, 2008 at 12:16 PM
Vernon Dent?
right4life on July 28, 2008 at 12:18 PM
“Calling Dr. Howard, Dr. Fine, Dr. Chavez…”
Akzed on July 28, 2008 at 12:21 PM
The liberals in this country still think he’s an awesome dude.
kirkill on July 28, 2008 at 12:21 PM
Friend of Chavez and Obama, William Ayers, was unavailable for comment.
JammieWearingFool on July 28, 2008 at 12:25 PM
Too bad you couldn’t superimpose Chavez into a Three Stooges skit and get him to say he had a great time vacationing in Niagara Falls!
pilamaye on July 28, 2008 at 12:28 PM
Chavez actually looks more like an angry cherry tomato than he does Chinese sap.
Seriously, this story puts Venezuela’s real importance in the world into context. Chavez sees himself as the new Fidel Castro when, in reality, he isn’t even a poor man’s Kim Jung Il. They have one major export (excluding illegals who make it to this country) and Chavez is learning the hard way that he simply doesn’t have the leverage to play with the big dogs.
My prediction: Chavez will ultimately claim the US is to blame.
highhopes on July 28, 2008 at 12:28 PM
“Slowly I turned… step by step…”
Akzed on July 28, 2008 at 12:28 PM
China has good refineries right now. It is converting them that can be interesting. But building a new one… that is funny. They really do not need too.
upinak on July 28, 2008 at 12:29 PM
Too bad Saint Cindy is busy with her run for Congress. I’m sure a couple of words from her will inspire the Venezualan oil industry to increase production.
GarandFan on July 28, 2008 at 12:33 PM
The Juice is everybody’s sap.
Rick on July 28, 2008 at 12:43 PM
I very seldom literally “Laugh Out Loud” over something I read on the Internet, but this did the trick.
Seriously though, Chavez is trying to take over Castro’s role in South America. The problem is that the Soviet Union was willing to spend billions just to give America a black eye, but China doesn’t seem to be taking the same approach.
logis on July 28, 2008 at 12:52 PM
For the leaders of China, Chavez is just a barely legal size fish to play.
Speakup on July 28, 2008 at 12:54 PM
This argument doesn’t hold water. China is willing to cut Oil rig deals with Cuba off the coast of Florida and cross drill but no long term investment deal with oil rich Venezuela. It doesn’t add up. They are all just waiting for the Political power to shift after this US election.
Egfrow on July 28, 2008 at 1:03 PM
Imgagine, Chavez actually thinking he could match wits with China…that’s what makes Chavez so dangerous.
right2bright on July 28, 2008 at 1:13 PM
Exactly, Russia wanted to dominate the world, China wants the world to buy from them…and then economically dominate.
China has enough of a country, enough people, not to worry about planting their flag to far from home.
right2bright on July 28, 2008 at 1:16 PM
Even Shemp?
Certainly not Curly Joe?
….well maybe still…
ej_pez on July 28, 2008 at 1:20 PM
Anyone who think’s China is not willing to exert it’s muscle outside of their hemisphere has not visited the Panama Canal in the last few years. Their military budget is one of the highest in the world currently. They are supplying our enemies on the GWOT via proxies. They are heavily invested in the outcome this upcoming Presidential election lest we forget about all the Dishwasher donations to Dem campaigns. China’s Rhetoric on Taiwan has heated up considerably in the last few years. Don’t discount Venezuela’s influence on OPEC, they led the charge to found it and still hold’s considerable sway. Chavez’s only real challenger to it’s agenda is Colombia which the Dems have been helping to marginalize and demonize.
Egfrow on July 28, 2008 at 1:26 PM
I think we should have a high tariff on high sulfur high density, we could call it polluting, petroleum. We could subsidize our refineries which refine it by the amount of the tax. The refineries were built when it was in the national interest to refine Venezuela crude and when Venezuela was friendly. Venezuela needs the US a hell of a lot more than we need them.
Nationalizing CITCO would also please me. I am against nationalization in general but Venezuela is a practitioner which has harmed US interests as well as my personal interests.
burt on July 28, 2008 at 1:39 PM
Sulfur? Chavez? That reminds me of Chavez speaking after Bush at the UN when he claimed the sulfer odor was from Bush being the devil… Perhaps it could have been a left-over scent in his nose from his oil but, I’ve long suspected that President Bush broke wind when he finished to leave a little present for Chavez.
I can also picture Chavez running in a circle on one foot while slapping his own face in a hand over hand motion and yelling “bwoob bwoob bwoob bwoob bwoob”.
CC
CapedConservative on July 28, 2008 at 1:42 PM
Megalomaniacs are easily fooled.
Omnipotence is indignant.
Entelechy on July 28, 2008 at 1:43 PM
I LOVE SHEMP!! he’s my favorite stooge!! especially the one where he has to get married to get an inheritance…ever notice the stooges had a lot of cute girls in their shorts?
yeah they weren’t as dumb as they looked!!
ps: joe besser was the worst stooge….
right4life on July 28, 2008 at 1:43 PM
Hugo - Note to self: Don’t make no more grande decisions on days when I chew a lotta coca.
whitetop on July 28, 2008 at 2:04 PM
Sometimes a picture is worth a thousand words.
HERE.
S on July 28, 2008 at 2:13 PM
The linked article quotes Erikson as saying:
The fund to pay for this deal, however, was created 16 months ago.
Confirmation that China has already made its contribution to this fund is here:
“Beijing has previously agreed a $4 billion loan by the Development Bank of China to Venezuela’s Social Development Bank, Bandes, which is to be repaid with oil.”
Platts Oilgram News
May 13, 2008 Tuesday
China, Venezuela agree two new oil deals;
CNPC, PDVSA to develop Orinoco crude, build big refinery in Guangdong
BYLINE: Vandana Hari
China has already paid for the refinery. Venezuela is going to repay China with oil. If China decides not to build the refinery, it is they who are the saps, since that is how they are going to get repaid.
This ridiculous article is only for the consumption of right wing extremists. The reality is that the rest of the world is busy making plans for the post-US-empire world.
Are you ever going to get over this stupid talking point?
Go to pdvsa.com, click on “Informes Financieros,” then click on “Información financiera y operacional al 31 de diciembre de 2007 (Versión en inglés- PDF).” There you will see Venezuela’s numbers for oil exports in 2007. If you add up all the countries, this comes out to 2.789 mbpd. Of this, Venezuela sends 1.363 mbpd to the US. The difference between the 2.789 mbpd exported and the Venezuelan claims for total production (about 3.15 mbpd) is consumed domestically. The numbers agree exactly with Venezuela’s claims. Nevertheless, claims are constantly made that Venezuala’s production is about 2.4 mbpd.”
So how is Venezuela fudging the numbers? Maybe the aren’t really exporting what they say! So let’s look at what the US says they are importing from Venezuela. The numbers here are not for 2007, but they are for a one year period. So the US claims it is importing 1.33 mbpd, which is less than 1% difference than what Venezuela claims. So tell me, if the US is not getting short changed, what country is? What country is getting 700,000 barrels of oil less per day than what Venezuela is telling them? If Venezuela is short-changing other countries to the tune of 700,000 bpd, I think it is those countries that are the sap’s, not Venezuela.
How can Venezuela’s production be 2.4 mbpd when they export 2.789 mbpd? This does not even take into account domestic consumption. Are they using no gas in Venezuela as well? That must be it.
Grow up. Venezuela’s production is exactly what they say it is.
dave742 on July 28, 2008 at 2:35 PM
ok, if things are so rosy in Venezuala, then why this, from the article YOU posted:
why does venezuala have to import any petroleum products?
right4life on July 28, 2008 at 2:46 PM
dave 742 at 2:35PM
This is from YOUR link:
Asshole.
hillbillyjim on July 28, 2008 at 2:50 PM
Make a deal with the devil and he owns you.
It is a much simpler foot in the door to make your buffoon host feel like a big shot. It will be easier to position their wujing in the Venezualan oil fields, and their security codes into Venezualan software.
The documentation of the worlds resources continues. The triangulation of the buffoons continues. At some point we will see Chinese influence in the Citgo refineries inside the US. More archiving of our strategic needs and more physical access to entities inside our borders
Useful tool for the Chinese. They seek success by quantity not quality. More footprints, more passcodes, more access points.
They are successful if you think locusts are successful. The numbers drive them to feed the insatiable machine.
Our few refineries are precious, and each is a tactical target. Lose one refinery in the US and watch home heating oil prices
entagor on July 28, 2008 at 3:04 PM
If I said that in that picture Chavez looks like a zoo chimp clutching the bars of his cage and shrieking dementedly at passersby just prior to a bout of frenzied poo-flinging, would I be considered a racist?
…
Oh. I would?
…
I see. Well, thank you for letting me know. Nothing could be further from my intent than to offend our furry cousins of the rainforest. I hereby apologize, wholeheartedly and unreservedly, to chimps, gorillas, orangutans, baboons, mandrills, langurs, tamarins, and other primates everywhere.
Mary in LA on July 28, 2008 at 3:31 PM
right4life:
Probably a refining issue, which they are addressing by making deals with China. Things like this happen anyway, even without refining issues. Canada is an oil exporting country, but they also import oil from Venezuela. I don’t know exactly why this happens, but it does. Why does Canada have to import any petroleum products? Are they evil commies as well?
Hillbillyjim:
The link is not mine. I do not own it. I referred to that link in connection with the China/Venezuela deal. I corroborated the information in that link (regarding the China/Venezuela deal) with a second reference. I have two references for the point that I made. The fact that one of the references repeats that same BS about oil production does not invalidate what that same link says about the China/Venezuela deal, especially when that info is corroborated by another source. Imbecile.
dave742 on July 28, 2008 at 3:48 PM
Hillbillyjim:
Also, the link I referred to is not saying anything about their stance concerning Venezuela’s oil production. They state what Venezuela’s claims are, and they say what other sources claim. They are simply reporting facts as to what different sources claim as to Venezuela’s oil production. I would personally agree with what the link says regarding this issue 100%. Venezuela does indeed claim one thing, and others do indeed claim something different. One is right, one is wrong. The article does not address this. I did. I made an argument for who I think is correct. Do you have a reply to my stance?
dave742 on July 28, 2008 at 4:00 PM
Ed:
One only needs a refinery that can filter out sulfur if you care about sulfur emissions, like they do in Europe or the US.
I suspect China will simply run Chavez’s crude through their refineries unaltered, and let the Chinese people choke on the fumes.
Kristopher on July 28, 2008 at 4:10 PM
Chavez getting played…. makes my lips turn into a grin.
sMack on July 28, 2008 at 10:59 PM
Idiot tin horns like this is what the CIA used to specialize in prior to the Pansy gutting of it. In the 50-70 time range this tard would have had a accident back when he was still planning his first campaign.
I can off hand think of quit a few other people that should have suffered a accident/rival hit job, long long ago before they got the juice to protect themselves, cough bin laden early Sudan.
The fact today we have to invade entire nations to kill a handful of people is a disgrace and direct result of the gutting of the CIA.
C-Low on July 29, 2008 at 12:12 AM