Jul
7
2010
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Helmerich Warns Other Firms After Venezuela Seizes Oil Rigs

Article originally published by The Wall Street Journal

Helmerich & Payne is warning other oil-field-services companies doing business in Venezuela after the drilling contractor saw 11 of its idled rigs expropriated last week by the government of President Hugo Chavez.

In a press release Tuesday, the Oklahoma-based company said other oil-services firms should be contemplating whether to stay in Venezuela. It also criticized the way state oil company Petroleos de Venezuela, or PDVSA, conducts its business.

“Reflecting on last week’s forced exit from Venezuela, it is clear now that PDVSA was not interested in both sides achieving commercial terms to return our rigs to work,” Helmerich said. “That approach only heightens concerns for our oil-field-service peers contemplating their future there, as it should.”

The Chavez-led government, which has nationalized large parts of its all-important oil industry as part of a declared push toward socialism, announced plans last month to take ownership of Helmerich’s rigs.

The rigs haven’t been used since late 2009, and the U.S. company said it wasn’t going to put them back into service until PDVSA paid it the $43 million it owed for work that was already completed.

PDVSA President Rafael Ramirez said the government decided to nationalize Helmerich’s rigs because the country couldn’t afford to let them continue to sit idle while new wells needed to be drilled.

In a partial response to PDVSA’s nonpayment to Helmerich, Mr. Ramirez accused the company of stubbornly refusing to renegotiate the rates it charged to PDVSA when oil prices were falling in early 2009 and PDVSA was falling behind on its bills.

Venezuela’s legislature approved the nationalization plan of Helmerich’s rigs last week, and the government has officially taken control of them. Mr. Ramirez said PDVSA plans to pay Helmerich for the rigs at “book value.”

In announcing the nationalization plan for Helmerich’s rigs last month, PDVSA also said it reached a deal for oil-services work with U.S. energy giant Schlumberger Ltd.

Helmerich said in its statement Tuesday that it leaves Venezuela “with our heads held high,” adding that the company fulfilled all of its contractual obligations. It also said it trained and employed thousands of Venezuelans and achieved an outstanding long-term safety record.

“The loyalty of our employees and many suppliers there will long be appreciated and remembered,” Helmerich said.

Helmerich said its future is partly reflected in new rig-building for “paying customers.”

Officials at PDVSA weren’t available to comment on Helmerich’s latest statement.

 
Jul
6
2010
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Venezuela is an ‘Animal Farm’ thanks to Chavez

Animal Farm in Venezuela (Photo Credits: Google Images)This blog was originally posted by the Huffington Post.

Last May, a private farm amidst Venezuela’s rolling green countryside was expropriated by the country’s president, Hugo Chavez. As Chavez later described, the farm’s owner “is out there crying and saying he is going to get his land back. Well, he’ll have to topple Chavez to get this back, because that farm belongs to the revolution now.”

The farm’s owner is Diego Arria. While Chavez has labeled Arria an “unburied corpse” of Venezuela’s past, Arria has hardly been a lifeless corpse.

Seventy-year-old Arria has served as Assistant Secretary General of the United Nations, Venezuelan ambassador to the United Nations, and as a personal advisor to former UN Secretary General Kofi Annan.

Arria captured the world’s attention when, as president of the U.N. Security Council, he condemned the failure of the international community to act against Serbian President Slobodan Milosevic for his brutal treatment of Bosnian Muslims. He was a star witness during the prosecution of Milosevic for the genocide at Srebrenica. Prior to his UN tenure, Arria had been a leading political figure in Venezuela, serving as governor of the capital Caracas in the 1970s.

In 1988, Arria purchased the farm – named “La Carolina” in memory of his deceased daughter – for $300,000. The property was then in ruins. Arria renovated and restored the property, developing it into a farm complete with an organic coffee plantation and grass-fed cows producing 600 gallons of milk daily.

Under the pretext of confiscating “unused land,” Venezuela’s National Land Institute stormed onto the property on May 1 with a platoon of soldiers. The uniformed men raided the farmhouse at gunpoint. They took Arria’s clothing and even his horse-riding boots as trophies.

Thirty-eight families depended on La Carolina for their livelihoods. They were told to find employment elsewhere. The cows, which Chávez claimed on television were “starving,” were given away as gifts. One of them ended up on a barbeque spit, cooked for President Chavez himself. I contacted a former employee at La Carolina who told me that the farm’s horses were slaughtered and sold as “beef.” The seizure of Arria’s farm and the plundering of his property has nothing to do with Venezuelan law or “reclaiming unused land.” In fact, the Venezuelan government is the largest landowner in the country and most of its holdings lie unused.

I feel partially responsible for Arria’s current predicament. I extended an invitation to him in April to speak at the Oslo Freedom Forum, a human rights conference in Norway that this year included Lech Walesa, Rebiya Kadeer, Anwar Ibrahim, and Garry Kasparov.

It was Arria’s participation in this conference that compelled him to speak out against Chavez’s human rights violations. Arria had told media covering the event that Chavez would one day face international justice for his crimes against the Venezuelan people. The reaction of the Chavez government to Arria’s statements was swift and implacable.

This expropriation was punishment for Arria’s criticism of Chávez. Chavez even presented photos of the farm on Venezuelan state television. He gloated that “It looked like Falcon Crest” comparing Arria’s farm to the winery estate featured on the American television show from the 1980s and underlined the presence of a swimming pool was a sign of its “bourgeois” nature. This sort of comment seeks only to sow resentment in the minds of those who believe inequalities of wealth represent an injustice that requires correction through theft.

The epic irony is that Chávez’s own family started with little wealth when he became president in 1999. His father and brothers now own extensive landholdings in the Venezuelan state of Barinas. They have acquired so much ill-gotten wealth – and display it with so much ostentation and vulgarity – that various European media outlets have called the Chavez’s “Venezuela’s Royal Family.” A rarely reported story was the internal fallout among Chavez’s cronies, when Stanford Bank collapsed amidst fraud so did several billion dollars worth of funds ransacked from the Venezuelan treasury.

Despite the new wealth for the Chavez family and Venezuela’s governing clique, the country suffers from elevated amounts of “critical” poverty and is currently one of the most violent countries in the world. Venezuela’s economy is in ruins, but Chavez continues to fund various international controversial projects. He provides support for the FARC terrorist army in Colombia (which recently includes the public revelation that he has kept them well-stocked with Swedish missiles purchased by Venezuela). He was also recently exposed in Spain as having facilitated training for Basque ETA terrorists in FARC camps. His penchant for villains and rogues extends to alliances with Belarus, Iran, Libya, Syria, Zimbabwe, and especially Cuba. Chavez also continues to send billions of petrodollars in aid to prop up the governments of Bolivia, Cuba, Ecuador, and Nicaragua – all despite the desperate needs of many of Venezuela’s own citizens.

Since 2006, Venezuela has carried out more than 800 expropriations across industries and involving all sorts of property: farms, radio stations, television studios, factories, private residences, banks, butcher shops, sandwich shops, steel mills and, most probably in the near future, the main Venezuelan beer company. There is a clear intention to terrorize a population with the fear of being expropriated in case of dissent or criticism of the government. From a legal perspective, there is an intention to replace jurisprudence surrounding the concept of private property with the term “social property” meaning: it belongs to everyone but will be controlled by the state.

Despite facing the wrath of Chavez, Diego Arria will not give up. He spent the month of May visiting government officials and organizations across Europe, discussing the seizure of his farm and denouncing the Chavez government. Upon realizing the lethargy and ignorance in the international arena about the abuses committed by the Chavez government, Arria has become the most eloquent and tenacious spokesman for those affected by the expropriation abuse. In June he met with the Council of Europe, the International Labor Organization (ILO) in Geneva, the Spanish parliament, and even the International Criminal Court at the Hague. As a result of Arria’s efforts, Chavez ordered another one of Arria’s properties seized in mid-June: a 90 acre orange orchard. Once again the employees were kicked off the land. Undaunted, Arria’s one-man effort continues and this month he will be visiting Canada, México, Colombia, Chile and Brazil.

In order for world opinion to mobilize against Chavez, he must be revealed as the petty authoritarian and enemy of individual rights that he is. This is a far more accurate view than the heroic champion of the poor and enemy of capitalism and Yankee imperialism as his apologists (most recently Oliver Stone) have tried to disguise him. Venezuela has lived under 11 years of Chavez. He has declared that he will rule until 2030. What will become of Venezuela in the next twenty years?

Despite an attachment to his farm La Carolina, Arria told me that he is willing under one condition to give up his farm to Chavez. That is, “so he can retire there now – provided that he gives us Venezuelans our country and our peace back.”

 
Jul
6
2010
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Chavez steps up threats against 24/7 Globovision TV

This article was originally published by AP.

Chavez stepped up his threats against Venezuela’s sole opposition-aligned television channel, saying its exiled owners are trying to destabilize his government and he won’t tolerate it.

Chavez called Globovision’s majority owner Guillermo Zuloaga and minority shareholder Nelson Mezerhane fugitive criminals and said he will wait for a while to see if they return to face accusations against them. If they don’t, Chavez said, “we’ll have to think to see what’s going to happen to that channel.”

The government has taken over a bank owned by Mezerhane, Banco Federal, saying regulators detected financial problems. And Chavez has warned that as authorities seize assets to cover deposits, they could go after Mezerhane’s stake in Globovision. He went further on Friday, asking: “How much could Globovision cost? It doesn’t amount to even 1% of all that money its owners took away,” Chavez said. “They took a very large sum of money.”

Attorney General Luisa Ortega said that a court had ordered Mezerhane’s arrest for alleged irregularities in his group of companies. She said authorities believe he took depositors’ money out of the country.

Chavez mockingly suggested the channel’s owners could come to the presidential palace to discuss the predicament over coffee.

Mezerhane, who was in Florida at the time of the bank takeover last month, has called the case political retribution and said he has no plans to return to the country for now. Mezerhane did not immediately respond to the latest accusations by Chavez.

Zuloaga disappeared last month after a court issued an arrest warrant for him and one of his sons. Associates said he left the country, though they didn’t say where he went.

Prosecutors want Zuloaga jailed while he awaits trial on charges of usury and conspiracy for keeping 24 new vehicles stored at a home he owns. Zuloaga, who also owns several car dealerships, has called the charges bogus and says prosecutors are carrying out a political vendetta on Chavez’ orders.

Chavez has often accused Globovision of conspiring against him and trying to undermine his government. He denies holding sway over prosecutors who have brought charges against Zuloaga, or over officials who seized control of the bank.

Globovision has been the only stridently anti-Chavez channel on the air since another opposition-aligned channel, RCTV, was forced off cable and satellite TV in January. RCTV had been booted off the open airwaves in 2007.

Globovision has recently been airing critical coverage of a scandal involving thousands of tons of food found beyond expiration dates and rotting in government storage.

Chavez said station managers “are trying to destabilize the country, following instructions from their fugitive, hidden owners. We aren’t going to permit it.”