Chevron's Ali Moshiri calls Venezuela:a country with low investment risk, etc

Moshiri, right, with friends Ramirez and Chavez

Ali Moshiri is the head of Chevron for Africa and Latin America. Before that he spent a long time in Venezuela and still has Chevron activities in Venezuela under his responsibility. Moshiri is a pleasant man, articulate, suave. His posture as Chevron's spokesperson has been that of a propagandist for the Venezuelan government, often defying all evidences about Venezuela's oil industry disaster.

In a recent talk at the James Barker Institute, in Houston, see video at https://www.youtube.com/watch?v=NOp37C8rm_U&feature=youtu.be, Mr. Moshiri’s  said the following (starting at about minute 45, remarks not in this order) :

·         Investment risk in Venezuela is relatively low, compared to other countries in the world

·         What is important is that the rate of return on investment is very high. While the margins in Venezuela are of $18 or more per barrel, in Africa they are more like $7 per barrel

·         Chevron did not feel they were being threatened with expropriation in Venezuela.. They were offered a choice and they chose to stay

·         Chevron also was the first company to pump money into PDVSA, giving that company a $2 billion loan

·         Chevron supports the Venezuelan government, which is the same as supporting the Venezuelan people

·         We don’t get into local politics, that is something for Venezuelans to do

·         We are, he said, partners of PDVSA,  which is a capable organization

·         We don’t try to change the system in Venezuela but work within the system

·         In Venezuela finding and producing oil is cheap and the resource base is enormous

·         We work in Venezuela step by step

·         Chavez tried to help the poor

·         Venezuela is a rich country,  great place, with lots of opportunity

·         On the minus side, the problems in Venezuela are not below the ground but above the ground and have to do with difficult logistics, insufficient skilled labor and a fragile supply chain

There is much here I disagree with.  Venezuela a  country of low investment risk? Bullshit. Mr. Moshiri certainly lowered this risk for Chevron by staying in very cozy terms with the discredited president of PDVSA, Rafael Ramirez. The change in contractual conditions to the foreign companies was an imperial ukase, take or leave it, not a choice. The proof is that several other companies preferred to leave the country and, even, to ask for arbitration. Pumping money into PDVSA (really, to the government)  in an electoral year was viewed by many Venezuelans as an act of complicity with the regime, one that will not be easily forgotten. His assertion about not getting into politics is false. Moshiri did get deeply into local politics, sucking up to the government.  It is true that finding oil in Venezuela is cheap, not so true that producing it is cheap. The oil from the Orinoco region is expensive to produce in a commercially acceptable form. His assertion about Chavez trying to help the poor does not stand to scrutiny. Handouts “help” the poor in the short term but deepen their poverty in the long term , as we are already finding out. Finally, contrary to what he says Venezuela is not a rich country. It is a rich government made of poor and ignorant people who depend on the government to get scraps, while the members of the regime become millionaires.

Mr. Moshiri seems to believe that ethics has no place in the Venezuelan oil business. I bet he would talk very differently about doing business in Ecuador, where the company was victim of an immense fraud in which the Correa government actively participated. Mr. Moshiri should know that ethics is not a function of geography.