A fresh round of expropriations in Venezuela has raised fears that the Opec producer’s already declining oil output could sink to its lowest level in the past 20 years.
Troops were mobilised over the weekend to assist Venezuela’s state-owned oil company, PDVSA, in seizing the assets of some 60 oil service companies, after a law was approved last week that paves the way for the state to take increasing control over its all-important oil industry. “To God what is God’s, and to Caesar what is Caesar’s,” said Venezuela’s President Hugo Chávez, as he presided over the expropriation of at least a dozen rigs, more than 30 oil terminals and some 300 boats.
More stuff for him to run into the ground. “The move is the latest sign of the deepening cashflow crisis that has bedeviled the state oil company for at least two years as it has become overburdened with responsibilities far removed from its core business – in particular funding and running the massive social programmes that have become the bedrock of Mr Chávez’s support.” And capital is being scared away, because of “regime uncertainty.”