Offshore

It looks as if I’ve found another book to add to your summer reading list – though this one is not exclusively about oil and gas. Instead of historical facts, this book passes on “jewels of wisdom.” Who doesn’t need some of those?

According to the press release that promotes Earl’s Pearls, the book provides advice about how to find “greater peace, happiness, and success on the job and off.” In the book, experts representing a variety of fields present their combined knowledge about such challenges as overcoming adversity, interviewing for a job, or closing a sale. The book is touted as “a collection of educational and inspirational how-to articles from BIC Alliance CEO and Founder Earl Heard, President and COO Thomas Brinsko, and a select group of BIC Magazine guest columnists.”

Earl’s Pearls features what BIC Alliance calls “some of the most valuable information related to business and personal motivation, leadership, professional development, and sales and marketing ever committed to print.” That’s certainly an ambitious claim. Since I haven’t read the entire book, however, I can’t confirm the claim’s accuracy.

Sections of the book present age-old proverbs, selected Bible verses, and Earl Heard’s “Tips for greater peace, happiness, and success.” The book includes such tips as:
• How to apply “The People Secret” on the job and off
• How to create your own renewable energy source
• Tips on how to dress for success and “seal the deal with a meal”
• Why happiness in the workplace leads to greater productivity
• How to understand the relationship between sales and marketing and give great presentations.

Contributors include Rick Phillips, founder of Phillips Sales and Staff Development; Whitney Strickland, vice president and chief marketing officer for AltairStrickland; Connie Voss, owner of Voss & Associates; Shirley A. White, founder and president of Success Images; and Scott Whitelaw, environmental health and safety director for Texas United Corp.

Earl’s Pearls is the fourth book by BIC Publishing, which is the custom book publishing division of BIC.

If you want are interested in ordering copies of Earl’s Pearls, you can visit the BIC site.

Republican Debbie Riddle, State Representative of Texas District 15, has issued a press release stating the Deepwater Horizon incident “has triggered an economic domino effect that could spell disaster for the Houston area.”

According to Riddle, “It doesn’t matter if a drop of oil ever hits Texas shores. The effects of fishing bans and drilling moratoriums combined with the environmental fallout are going to cost Texas millions of dollars and thousands of jobs unless we get this situation under control immediately.”

As chairwoman of the National Foundation for Women Legislators (NFWL), Riddle visited on June 11 with US Coast Guard officials at the White House before going to Louisiana to meet with BP executives, members of the Louisiana legislature, and fishermen to discuss containment strategies and the potential impact of the disaster on Texas businesses.

The primary point of Riddle’s observations is that the repercussions of the spill and the subsequent legislation will be significant. “When shrimpers can’t catch it, then our Houston-area businessmen can’t process it, and our restaurants and grocery stores can’t sell it,” Riddle said. “That means we lose businesses and jobs, and our state economy loses millions more dollars in revenue, and that’s only one of many industries that could be impacted.”

Meanwhile, in a press release put out by the Domestic Energy Producers Alliance (DEPA), Mike Cantrell, president of the 1,200-member DEPA, took issue with being tarred with the same brush as BP. Cantrell urged Congress to take strong steps to protect America’s shores against events like the Deepwater Horizon disaster, but cautioned Congress not to over-politicize the event into a vendetta against independent oil and natural gas producers by pushing for punitive laws or regulations that would cause energy prices to spike.

“We are not BP,” Cantrell said. “Let’s not throw small, independent oil and gas producers under the bus to punish BP.”

Although on the surface, Cantrell’s argument is about taxes, it is also about employment. “Taxing the energy sector’s small business people, who drill 90-plus percent of onshore wells, only costs jobs and raises the price of energy to the American consumer to an unacceptable level, especially in such tough economic times,” he said.

His advice? “Let’s focus on the actual problem and not on off-target political agendas.”

While Riddle and Cantrell play to a large audience, others are working in a smaller arena toward the same objective.

Paul Howes, president and CEO of Newpark Resources, sent a message to his employees (many of whom have circulated it outside the company), recruiting their efforts to petition the US government to give serious consideration to the ramifications of the recently announced deepwater drilling moratorium in the Gulf of Mexico.
The message says:
“You are all aware of the moratorium imposed on drilling in the Gulf of Mexico. The impact on our customers, this industry, and our country will be profound. Newpark has joined with the American Petroleum Institute, its members and partners to make sure that the voices of those employed in this industry can be heard in Washington. If you are interested in reading more, and possibly sending a message to Ken Salazar, Secretary of the Interior, on the impact of the drilling moratorium, please use the following link to the co-branded site of EnergyNation and Newpark Resources.”

In the interest of giving you the opportunity to see the site and send a letter of your own, I’m providing the link here.

Everyone and his brother has an opinion about what should be done in the wake of the Deepwater Horizon blowout in the Gulf of Mexico, but the only opinion that really matters is the one in the White House.

President Obama has taken stock of the environmental consequences of the leaking oil from the Macondo well and has determined that to avert another accident, there will be no deepwater exploration drilling in the GoM for another five months.

While supporters of renewable energy are wildly enthusiastic about this dictate, there are many who are not happy at all. The reason is that we’re not just talking here about enforcing a moratorium on drilling. We’re talking about putting a stranglehold on the nation’s economy.

According to a press release put out this week by the International Association of Drilling Contractors (IADC), the drilling ban will have serious economic repercussions. 

“The federally ordered drilling suspension will idle approximately 33 deepwater mobile offshore drilling units not involved in the Macondo relief-well effort,” the press release says, each of which employs 180-280 workers, according to the Louisiana Mid-Continent Oil and Gas Association. “In addition, according to LMOGA, each of these jobs supports four other industry employees. This represents 900-1,400 jobs impacted per rig, or an aggregate 29,700-46,200 jobs total. LMOGA puts the direct wages lost as high as $330 million per month. These figures exclude job and income losses within these workers’ communities”

The fact is that for every idle rig, there are not only idle rig crews, but idle helicopter transport services, idle supply boats, idle service providers…  I think you get the picture. And these jobs constitute the livelihood of many people in the region. Add these unemployment numbers to those from the fishing fleet that can’t fish because of the oil slick, and the picture becomes very bleak.

Although mainstream media seems incredulous about Louisianans who, despite the spill, are opposed to the moratorium, the fact is that by shutting down deepwater drilling, the US government has dealt the region a second deadly blow.

The fact is that however horrible this situation is for Louisiana, the horror will not be confined to this region. The repercussions of President Obama’s decision will be extremely far reaching, and they will impact Americans across the nation.

At an event hosted by Ernst & Young in Houston on Tuesday, June 8, to present the results of this year’s US E&P benchmark study, the discussion turned to the Deepwater Horizon incident and the effects it will have on the US economy.

“The impact of this will be very substantive,” according to Marcela Donadio, Americas Oil & Gas Sector Leader for E&Y. The moratorium, in her opinion, will lead to “a massive shifting of jobs and operations outside the US.” We can’t forget, Donadio said, that this industry is very mobile. “All of these assets are deployable.”  And once these assets leave the US, it will be hard to bring them back. “It will be the jobs here that will be lost.”

John Russell, Assurance Partner, agreed. “If they leave the Gulf of Mexico,” he said, “those investments will be gone for five to 10 years.”

And if those rigs leave, they also will dramatically reduce US oil production. According to Charles Swanson, Houston Office Managing Partner, the $550 to $700 billion being spent on foreign oil yearly is already bleeding the US dry. Because the moratorium will reduce production numbers, it will lead to even higher levels of oil imports.

The headlines today are the oily birds. The headlines in a few months will be $4 or $5/gallon gasoline.

I have to agree with Donadio, who summed it up succinctly. “The impact of this will be very, very substantive.”

I got an email a little while ago that contained a suggested reading list from Jack Rafuse, former energy adviser to the Nixon administration and the current head of Rafuse Consulting. He is an independent consultant on energy and trade issues who apparently enjoys reading books about oil and gas.

The email offers Rafuse’s “summer reading list” of books that give historical perspective to America’s current energy policy debates. I am an avid reader; so I was interested to take a look at his choices and see which of them I had already read. As it turned out, I’m reading one of them now.

Since I think Rafuse has made some well-considered selections, I’m passing them along. So without further ado, here are his book list and short reviews.

Ida M. Tarbell, History of the Standard Oil Company (1904) — “Muckraking” at its best; more thorough and data-based than most of today’s “investigative journalism.” As a youngster in the young years of the industry Tarbell was convinced that her father’s company was victimized by J. D. Rockefeller’s Standard Oil Company. Later, as a well-known author and journalist she made the case against Standard Oil’s methods. Like an auditor, she examined thousands of pages of documents and data. She interviewed all who would talk about the company’s dealings, and wrote a 19-installment series in McLure’s Magazine, from 1902 to 1904. The resultant book helped inspire President Teddy Roosevelt’s Trust-Busting efforts.

Anthony Sampson, The Seven Sisters: The Great Oil Companies and the World that they Shaped (1975) traces the growth, “character” and image of international US and British/Dutch companies, the rise of OPEC and its Oil Weapon before and after the Arab Oil Embargo (1973-1974). The best-seller familiarized Americans with the Seven Sisters and may have strengthened the view (Sampson never made the charge) that the companies were responsible for the gasoline lines and shortages. Later academic and government studies concluded that the lines were due to the Nixon Administration’s price controls (no other nation had price controls, no other nation had gasoline lines); the studies didn’t change minds; oil and gasoline prices (and no other) continued under government regulation for several years.

Daniel Yergin, The Prize: The Epic Quest for Oil, Money and Power (1990) givesthe history of the oil industry from before the first successful well until Saddam Hussein’s invasion of Kuwait. Timeliness and topicality helped the book to huge sales and a Pulitzer Prize, but some critics argue that it is less objective than Sampson’s book and call it too sympathetic to the oil industry. It was subsequently made into a documentary TV series, ensuring an even wider audience. It is more inclusive than The Seven Sisters; the two should be updated and read together (or sequentially).

J. Howard Marshall, II, Done in Oil: An Autobiography of J. Howard Marshall, II (1994) is a lesson for our times. Marshall was a lawyer, university professor, an oil executive, a Federal regulator who helped the US win World War II, and a man who contributed significantly in many roles. Early on, at Harold Ickes’ Department of Interior he was the primary author of the Connally Hot Oil Act, regulating the flow of oil among the states. He later worked for Standard Oil of California (Chevron – one of the Seven Sisters) and its law firm; early in World War II he was named Solicitor of the Petroleum Administration for War, and was directly involved in setting policies that enabled the US to fuel the world’s war efforts over the next several years. Marshall’s career made clear that responsible people can work in industry at times and as regulators at other times, and serve their country at all times.

Matthew Simmons, Twilight in the Desert: the Coming Saudi Oil Shock and the World Economy (2005) — parallels the theory of the late geophysicist M. King Hubbert, who calculated that world oil production would peak by about 1970 and be fading by the end of the 20th Century.  Simmons, an energy financier, focuses on Saudi Arabia (credited with about 20% of Proved World Oil Reserves); his analysis of hundreds of field studies over decades raises considerable doubt that the Saudis will produce 20 million to 25 million barrels per day of crude oil by 2030 (they were at 10 million in 2004). His title makes clear his conclusions but he does not despair or urge a Green Manhattan Project. He calls for policies that: impart better data on reserves, calculate costs nations are willing to bear to extend conventional oil supplies, modify consumption patterns, tighten emission and control regulations, and develop new technologies and alternative forms of energy. He urges these steps in the interest of long-term stability and security, recognizing the need for Mid-East nations to alter their outlook and behavior in light of the coming “Twilight.”

In the middle of April, the UK Energy Bill received “Royal Assent” and became law. This was a fairly fast move, as the bill was only introduced to Parliament in November 2009.

The Energy Act 2010 includes two fairly significant components. One is to deliver a financial incentive to move four commercial scale carbon capture and storage (CCS) projects forward. The other is to clarify the role of the Office of Gas and Electricity Markets (Ofgem), the UK’s energy regulator.

The Act also mandates social price support, which means energy companies will have to provide support to the fuel poor.

The Energy Act requires the UK government to prepare regular reports on the progress made on the de-carbonization of electricity generation and the development and use of CCS. And it extends the time limit from 12 months to five years within which Ofgem can impose financial penalties on energy suppliers for breaches of license conditions. In addition, the act allows the government to set the period within which energy companies must inform customers of changes to their gas and electricity tariffs and enables action to be taken against unfair cross-subsidy between gas and electricity supply.

Explaining the significance of the act, a statement on the Parliament website reads: “The Bill follows on from the low carbon transition plan, published in July 2009. This plan aims to deliver emissions cuts of 34% from 1990 levels by 2020 and of 80% by 2050, while maintaining security of supply, maximizing economic opportunities, and protecting vulnerable consumers. The Bill will deliver some of the primary legislation required by the plan.”

Those are some seriously ambitious goals.

Meanwhile, across the Atlantic, the White House announced on Nov. 25, 2009, that President Barack Obama is offering a US target for reducing greenhouse gas (GHG) emissions in the range of 17% below 2005 levels by 2020.

The day after the White House announced the US GHG targets, China said it will reduce the intensity of its carbon dioxide emissions by 40% to 45% by 2020. By definition, carbon dioxide emissions intensity is defined as the amount of carbon dioxide emissions per unit of gross domestic product.

So although there wasn’t great cheering and optimism following the United Nations Climate Change Conference (a.k.a the Copenhagen Summit) last December, it appears that a number of countries that are significant emitters of carbon dioxide are making strides toward emissions reduction.

I don’t know how optimistic I feel about the chances of meeting the stated goals, but any progress toward curtailing emissions is a step in the right direction.

And apparently, three or four heads are better yet, particularly if those heads are coming at a problem from different directions. At least, that is the opinion of Charles Leadbeater, a leading authority on innovation and creativity. Open collaboration, he said, is becoming increasingly important.

The value of collaboration is that it brings together creative minds that result in truly innovative ideas. And according to Leadbeater, the ability to find creative solutions is what sets apart companies that are true technology innovators from those that are simply solving technology problems.

In an interesting talk about open innovation at the Schlumberger Information Solutions (SIS) forum in London this week, Leadbeater talked about history and innovation and identified some of the “myths” that surround the idea of innovation.

One of the most common of those myths is that ideas come from lone geniuses. According to Leadbeater, the truth is that collaboration is generally the source of great ideas. “Innovation is like having a good conversation where ideas are generated.” It is rarely the result of a “Eureka moment,” he said, noting that most science today is done in virtual teams.

According to Leadbeater, no matter the problem or solution, those who invent technology rarely know what they technology is for. That sounds a bit counterintuitive, but Leadbeater supplied some examples that illustrated his point. One was the i-Phone. The inventors of the phone wanted to create an interactive communications device. Users, however, determined what the real value of the phone would be when they discovered applications (a.k.a. “apps”) they could download. The enormous demand for apps has translated into big business.

According to Leadbeater, the apps business has generated far more revenue than the phones themselves. And apps are only the beginning. The phone is the gateway to a “cornucopia of products,” he said. And that long list of products will take form when end users decide what additional things they want from the device.

“Time and again, it is at the intersection of the product and the consumer where the value and application of an idea occurs,” Leadbeater said. Outsiders are an essential part of the innovation process. Consumer innovators adapt, modify, develop, invent, and apply technologies. Through this process, he said, they show producers what technology is for.

Some completely new ideas are generated by collaborative efforts, but others are the result of simply combining existing technologies, he said giving wheeled luggage as a simple example. “The wheel has been around a long time,” Leadbeater said, and people have been carrying luggage for hundreds of years. Yet it wasn’t until someone came up with the idea of putting the wheels on the luggage that the world saw wheeled bags. Now, Leadbeater said, an airline passenger can’t travel without seeing them everywhere.

Clearly, innovation and collaboration take many forms, but regardless of the situation, Leadbeater said, open innovation broadens the realm of problem solving. Today, open innovation incorporates contributors from different companies, different disciplines, and different backgrounds, often in a Web-based setting.

Open collaboration is the first step in a process, according to Leadbeater. “We’ve only just begun to use the Web,” he said, explaining that the scope and power of the Web will bring many changes. “It will become more versatile, more ubiquitous, and at the same time, more personal.” And the resulting changes that will take place are not even imaginable today he said.

The search for solutions is moving rapidly forward, and the means of finding solutions is changing. Like it or not, collaboration is the wave of the future. And those who learn how to pursue open innovation will be the ones who set the pace in the future, Leadbeater said.

Given the number and scope of the innovative solutions presented and discussed at the forum, I’m inclined to agree.

The emotional reaction to the Deepwater Horizon explosion in the Gulf of Mexico (GoM) has been intense.

Within the industry, there has been incredulity and dismay. We know how much emphasis there is on safety and how much time and effort is spent to avoid just this sort of disaster. The fact of the matter is that this blowout was a shock. It has been 40 years since the industry experienced a drilling incident of this magnitude.

Detractors of the oil and gas industry, meanwhile, are shouting “We told you so!” and insisting that offshore drilling be halted.

The US Senate Committee on Environment and Public Works held a hearing on May 11 to address the incident. Representatives from BP, drilling contractor Transocean Ltd., and oilfield services company Halliburton testified before government officials during the first of many expected hearings.

According to an online article published by Hart, BP America Inc. president and chairman Lamar McKay, Transocean president and chief executive Steven Newman ,and Tim Probert, chief health, safety, and environmental officer at Halliburton were among the witnesses at the Senate energy and natural resources committee hearing, where Senators and the respective parties focused on technical failures during drilling operations that potentially could have caused the blowout.

Nobody expected the Tuesday event to shed additional light on the actual cause, so there shouldn’t be much disappointment that no such thing happened.

The event did, however, serve as a springboard for Joshua Reichert, managing director of the Pew Environment Group, to issue a statement, which was published in a May 11, PR Newswire press release.

“The current safety standards for oil drilling have failed to protect the Gulf of Mexico and have revealed significant lapses and problems in our drilling policy,” Reichert said. “This spill is likely to have a devastating effect on the Gulf’s coastal communities, its marine life and the fishing industry. New offshore drilling, both exploration and production, should not occur until robust safety and environmental standards are developed and put in place that are far more protective than those we have today.

Reichert pointed out that over the past few weeks, BP has deployed a several methods to stop the flow of oil into the GoM, but has not yet succeeded. 

To this point, Reichert’s comments are by and large accurate. The emotional part followed, with similarities drawn between this event and the Exxon Valdez oil tanker incident and allegations that the oil will not be cleaned up. This observation was followed with an admonition against offshore drilling.
“What is happening in the Gulf could just as easily happen off the beaches of the southeast Atlantic coast or the wild and pristine Arctic coastline. No other coastal communities should face the heartbreak that the Gulf is facing now,” he said.

Though it is wise to suspend drilling activity in the GoM in the short term, ruling that offshore drilling should be curtailed and limited indefinitely is misguided. Only about 13% of the US OCS is available for exploration and development at present. Despite that, about 20% of the oil used domestically by the US comes from the GoM. Arresting development in would force the US to increase its dependence on foreign oil.

I agree that it is important to determine the cause of the Deepwater Horizon blowout. I agree that the industry is responsible for the failure, whatever it is, and that new HSE requirements could be in order. And I agree that the cleanup is going to be costly in many ways to many people – not just to the company that foots the bill.

However, emotionally charged as this event has become, the facts remain. The US uses a huge amount of oil, and much of it comes from the GoM.

Before we as a nation make hasty decisions about offshore oil and gas E&P, we need to look at the big picture and determine whether emotions have clouded our judgment.

It might surprise some to hear that Forbes magazine has listed the Houston Technology Center (HTC) as one of the ten technology incubators that are changing the world.

An article written by Forbes editor Christopher Steiner ran on the company’s Web site on April 16. The article, “Ten Technology Incubators Changing the World” lists each of the ten and describes its function

Steiner poses the question, “Entrepreneurship spurs economic growth, but how do you spur entrepreneurship?” The answer, as it turns out, is technology incubators.

The article begins with the admission that some of the biggest companies in the world (HP and Google among them), were “born in garages and basements.” But a more direct route to commercializing new ideas, he says, is technology incubators.

According to the article, “In the last few decades 300 of these facilities have sprung up in the US, many attached to universities. Incubators now host about 6,000 companies and provide an array of services, from expensive lab equipment to accounting and secretarial support.”

One of the most important take-aways from the article is this: “Creating jobs by creating companies takes time, but the rewards are greater. A 2009 study by the U.S. Department of Commerce’s Economic Development Administration found that, for each US $10,000 EDA investment, incubators created 45 jobs.”

The HTC has been raising its profile and expanding its reach in Houston. The organization defines itself as a nonprofit that enables and accelerates the growth of emerging technology companies for the purpose of creating jobs and promoting economic development in the greater Houston area.

Its vision is to be a driving force in placing Houston in a position of global recognition as one of the top centers of technology innovation and commercialization by 2012, emphasizing energy, information technology, life sciences, nanotechnology and NASA/aerospace technology.

HTC accelerates the commercializationof emerging technology companies by providing in-depth business guidance, access to capital and service providers, and entrepreneurial education. HTC also promotes Houston as a leading technology city and serves as a hub for the local technology business community.

Supported by more than 300 corporations and organizations along with Houston’s leading academic institutions, Greater Houston Partnership, Texas Medical Center, NASA-Johnson Space Center and the City of Houston, HTC has become Houston’s center of technology entrepreneurship by assisting companies within several key sectors: energy, technology, life sciences, nanotechnology, and NASA/aerospace technologies.

In ten years of operation, HTC has provided feedback to more than 1,000 companies and coached nearly 250 companies, helping them to raise more than $750 million and creating thousands of jobs. And it is always looking for more members. According to Maryanne Barker,
Director of the Energy Practice at HTC, “Now more than ever, it’s critical that the energy industry value and support the development of new energy technologies.”

If you want to know more about HTC, you can visit the Web site http://www.houstontech.org/

HTC serves as the Gulf Coast Regional Center of Innovation and Commercialization (Gulf Coast RCIC) for Texas Governor Rick Perry’s Emerging Technology Fund (ETF), assisting small to mid-size technology firms expedite the commercialization of new life-changing inventions and improving research at Texas universities.

To date, the Gulf Coast RCIC has helped 31 Gulf Coast region companies have been authorized to receive $31 million in funding from the Texas ETF program.

Now THIS is interesting news.

Apparently, for the past 21 years, the superhero world has had a member I knew nothing about. His name is Captain Ozone, and he has been saving endangered species, promoting renewable energy and ecological art, and teaching school kids how to become environmental activists on television.

I received a press release today that informed me Captain Ozone (“considered by many to be the most phenomenal environmental activist of all time.”) allegedly started the modern-day “real-life superhero” movement when he made his debut in 1989.

The masked superhero apparently claims to be from the year 2039 from whence he time-traveled to 1989 on a mission to save the world from an ill-fated future.

Unfamiliar with Captain Ozone, I decided to view a video documentary about his superhero achievements so as to be better informed. If you want to follow suit, click here.  I think it is worth the visit.

If you check out the video, you’ll notice that Captain Ozone isn’t as svelte as some other superheroes you’ve seen. And his high-tech equipment is reminiscent of stuff you probably watched Maxwell Smart use in the “Get Smart” TV series in the mid-1960s.

While Captain Ozone is similar in some ways to other costumed crime fighters, he is unique in others. Those interviewed in the video describe him as “an artist, a scientist, a sly jokester, and a noble defender of natural resources.” He also is oddly described as a “bean eating flatulating superhero.”

Make of this what you will.

According to the press release, Captain Ozone wants America to be the vanguard of the Green Power revolution, and he is “all for Obama’s New Energy for America plan.”

So with that said, I inform you that Captain Ozone and Environmental Media Northwest are leading what they claim will be the biggest peaceful demonstration for renewable energy ever! It is called “Green Power Rally,” and it is going to take place in many cities throughout the US and Canada on July 31, 2010.

By definition, Green Power Rally is to be an optimistic peaceful demonstration to raise public awareness and support for zero-emissions energy sources such as solar, wind, geothermal, and hydro power.

Hung up a bit on getting to know Captain Ozone, I didn’t look into the actual rally, but you can if you like. And if you want to become a peaceful demonstrator for Green Power Rally, you can sign up here.

Oh, and if you want to contact Captain Ozone directly, you can find him on Myspace listed under CaptainOzone.

A Reuters story published on April 15 hailed Venezuelan Oil Minister Rafael Ramirez’s visit to the US as a milestone, noting that the “overture” of his visit marked the country’s first talks in Washington in six years.

The visit was one in a string of political calls around the world made by Ramirez on behalf of his government.  He had already visited Russia, China, Japan, and several countries in Europe.

Ramirez’s objective was to encourage these countries to invest in Venezuela’s oil fields. The country’s role as an exporter has global impact. It is the world’s eighth largest oil exporter and the fourth biggest foreign oil supplier to the US market.

According to Reuters editors Timothy Gardner and Tom Doggett, Venezuela has an estimated 99.4 Bbbl of proved oil reserves, with last year’s production averaging 2.2 MMb/d. This figure is impressive, but it reflects a drop of 190,000 b/d from 2008.

The real issue (and the reason for the “overture”) is that Venezuela lacks the technology to produce its heavy oil.

Somehow, this fact wasn’t weighed several years ago when Venezuela forced foreign companies to renegotiate their oil development contracts, which dramatically reducing profits. Many US companies bailed, deciding to sell their holdings rather than accept new unfavorable terms. Exxon Mobil and ConocoPhillips pulled out of Venezuela in 2007 after being pushed out of multibillion-dollar Orinoco projects.

Interestingly, according to the Reuters story, Ramirez said Venezuela-US relations had been hurt by the Bush administration, which he said had been “hostile” to his country. Ramirez reportedly explained, “There’s no reason whatsoever for this relationship to have been halted.”

This logic reminds me of George Orwell’s book 1984, in which the main character, Winston Smith, works for the Ministry of Truth, where he spends all day re-writing historical events to match the current government message.

I suppose the withdrawal of US-based oil companies had nothing to do with the fact that Venezuela changed the rules and implemented extortionate taxes.

Gardner and Doggett reported the very interesting view of Patrick Esteruelas, Latin America analyst at Eurasia Group in New York, who said he didn’t think Ramirez’s comments about US firms were significant because Venezuela has not discriminated against companies from specific countries. Instead, Esteruelas said, “It has just demanded an equally aggressive share of the (oilfield) rent from all willing investors,” noting that very few US companies have shown much willingness to accept the new terms.

So the facts that the national oil company in Venezuela reclaimed acreage and unceremoniously hiked taxes are not to be considered as a partial cause for the present lack of foreign investors in Venezuela. Interesting…..

And one wonders just how convincing Ramirez can be in inviting foreigners back into Venezuela – particularly when one of those on the guest list is the US – particularly while President Hugo Chavez continues to lambaste the US government at every turn.

According to a Reuters story, in mid-January, Chavez accused the US of “occupying” Haiti following the devastating earthquake and aftershocks earlier in the year.

And Press TV reported a few days later that Chavez had accused the US of actually causing the destruction in Haiti by testing what he called a “tectonic weapon” to induce the catastrophic quake.

It doesn’t really appear that much has changed.

Ramirez might be scurrying around hat in hand begging for investors, but back home, Chavez is singing the same old anti-American song.