Monthly Archives: December 2012

US Army War College publishes bad writing, says Venezuela aids all evildoers


I was having fun trying to understand the abstract, which is one of the worst pieces of English-language writing I have ever seen published. (At first I thought maybe the copy editor had been waterboarded and was rebelling by allowing this to go to press, but now I think it’s actually the English language being tortured in real time.)

And then I read the paper, and the fun ended. Here is a selectively informed, biased observer coming up with preordained conclusions. Shorter (and clearer) Max Manwaring: Venezuelan President Hugo Chávez is actively exporting the ideology and practice of asymetrical warfare to a wide range of criminal, terrorist and anti-US organizations and governments as part of an unreformed Leninist revolutionary ideology.

Such thinking would be no big deal if it were just some fringe dude on the Intertubes. In fact, there is a benefit in having paranoid fantasies of all sorts popping up here and there, as sometimes those fantasies turn out to be correct. But in this case, I worry, as this is coming out of the US Army War College. Sure, it has plenty of disclaimers saying it’s not official US doctrine, thinking or policy. But still, if the people making US defense policy take seriously this kind of scholarship, that country is in worse trouble than I thought. Continue reading

Chevron in Argentina: Hoping for a breakdown in division of powers?

The Ecuador plaintiffs seeking $19 billion from Chevron Corp. just sent out an interesting little press release, pointing out this article in La Nación in Argentina. I think it’s worth noting. Why? Because most of the pro-corporate types who watch South America point to the breakdown in division of powers between courts and executive as being a bad thing. And here, La Nación says that a big corporation –Chevron– will only move ahead with its new oil plans if judges rule a particular way on a court case. That could set up an interesting situation regarding division of powers, as the executive branch wants Chevron’s investment and so it has an interest in vacating a big judgment in favor of Ecuadorian rain forest residents. Here’s the link, and here’s a bit of a translation.

The YPF deal depends on an end to the Chevron injunction
It was admitted by the manager of the local unit of the US company, whose funds are frozen by judicial decision Continue reading

Venezuelan intelligence defends Derwick Associates from the deadly peril of journalism

Hey, remember Derwick Associates? The guys who recently accused me of being part of a global defamation conspiracy because I:

1. Reposted a deleted article about the company, originally posted at, which mostly rehashed stuff from reporting originally found in an article by Venezuelan reporter César Batiz in the newspaper Últimas Noticias
2. Laughed at the lawyer letter they sent me demanding I take down that page
3. Gave Batiz evidence that the FBI and US Treasury Department had looked at articles about Derwick on this website
4. Wrote a little note pointing out that there are databases out there to show Derwick’s connection to planes that are registered through anonymizing services

I don’t think this is really about defamation, as nobody has yet told me how anything I have said was defamatory. Instead, they just seem very keen on avoiding press attention.

Personally, I find this all pretty funny, as their efforts have been mostly self-defeating. At first I didn’t care much about this Derwick case. But these guys couldn’t just sit there and let the skeptical reporting go. They had to attack. And now, they are looking ever more interesting.

But the laugh riot doesn’t end there. Because now, Venezuela’s “intelligence” police — or someone claiming to represent them — have joined the fun, thereby guaranteeing even MORE attention on this extraordinarily successful company. Continue reading

Pacific Rubiales Energy: Equal time on union issues (plus fe errata)

As I said the other day, I contacted Pacific Rubiales for comment on this story and the company sent me a response Sunday. I am just posting it as I was out in the mountains, away from even telephone contact. With no edits at all, here is what the company sent me. Always best to hear all sides in a situation where some people are being killed and others are being accused.

First and foremost, we would like to thank you for the possibility of commenting the story you referenced in your e-mail. It is important to be very precise with the information to be published, particularly bearing in mind facts pertaining to this case. To this end, please bear in mind the following:

1. Milton Enrique Vivas was a worker in the Cara-Cara Field, which is at least 170km away from PRE’s operations.
2. Cara-Cara is an concession contract for oil and gas production called “Contrato de Asociación” by and between the Spanish Company CEPSA and Ecopetrol.
3. Pacific Rubiales has no participation in this operation.
4. Mr. Vivas was not actively pursuing any union related agenda with pacific Rubiales.
5. The Police Department (Under Col. Jaime Romero, Meta’s Maximum authority) attested a couple of days back stating that Mr. Vivas filed complaints and seeked Police protection from 4 different Union representatives, specifically from USO, having stated that he was under duress and constant threats. source:

Regarding our official stance and our comment, we would like to state that Pacific has been respectful of the union activities undertaken by the USO with direct and indirect employees at the Fields, particularly when you consider that Pacific has allowed the USO to execute several activities in the Fields, for the promotion and understanding of the freedom of association in the Oil & Gas Sector regardless of the fact that they do not represent any of the Company’s employees at the Field. Any and all allegations stated by the USO regarding discharges, dismissals, excessive work hours and days, precarious housing conditions, and violation to the right of association are not only misleading towards the general public, but we also categorically deny; we would nonetheless be pleased to review any actual support. Regarding CGC and MRS, we would be happy to forward your observations to the specific Company, considering that these are outside the scope of our Management Team.

Also, Boz checks in to remind me that Colombia is no longer the deadliest place in the world to be a unionist, as Venezuela took over the top spot.

And, I am amazed that my report about a Colombian unionist getting killed got a tenth the page views of my off-the-cuff ramblings about possible directions of the Venezuelan oil industry post-Chávez.The Colombia story is more important and includes original reporting that required a trip to a remote part of the world where almost no English language reporters have gone. But I guess I’ve learned an important lesson. You want hits? Make provocative and un-disprovable statements about Venezuela.

Derwick Associates says I’m an agent in a defamation campaign

Published today in El Nacional, a newspaper in Caracas. If there’s interest I’ll translate this, but don’t have time at this very second.

Derwick can’t be bothered to send a letter here, despite my permanent policy of providing a forum for those who take exception to my reporting and my specific request to their lawyers that they write me if they have an issue with anything I’ve said. Instead, they took out the ad, text pasted below, in which call me and others “agents” in a “campaign of defamation.” If I’m someone’s agent, I wish they’d tell me where to pick up my check.

By the way, Derwick’s reputation self-due-diligence company, FTI Consulting, had someone searching for online info about me the other day. No big deal, but I find it odd how so many “investigators” snoop around in obvious, self-revealing ways but never bother to pick up the phone and just ask questions. Reminds me of this.

Anyway, I thought this statement from Derwick deserved to be archived publicly. So here you go.


El pasado 29 de noviembre recibimos un correo electrónico del periodista César Bátiz, miembro de la Cadena Capriles, en el que consultaba la opinión de nuestra empresa sobre “la búsqueda de información que han iniciado instituciones de EEUU, como FBI y los departamentos de Estado, Tesoro y Seguridad de la Nación, acerca de Derwick”. Nuestra respuesta, enviaba el mismo día, se concentraba en tres puntos: Continue reading

If Venezuela government changes, what happens to the oil industry?

It’s a complicated question but in light of everyone speculating on Venezuela’s future these days, I figure I could toss in my contribution. These are just a few thoughts about what will happen to Venezuela’s oil industry if President Hugo Chávez has to leave office for any reason, including illness or death — both of which seem freshly possible with his difficult cancer operation this week. But here’s the spoiler: I don’t think anything’s going to change. Continue reading

Colombia oilfield union activist killed, fingers get pointed

Llanos of Colombia's Meta Department seen from Termotecnica worker housing occupied by strikers, August 2012.

Llanos of Colombia’s Meta Department seen from Termotecnica worker housing occupied by strikers, August 2012.

Milton Enrique Vivas, 42 was killed 11 December. He was a union activist who had taken part in fights for better conditions at different companies.

The Union Sindical Obrera (USO) oil union, in its statement on the web, suggests that paramilitaries may have been to blame, and makes a point of mentioning that Vivas was part of the union struggle against Pacific Rubiales Energy Corp., without implicating the company in the crime. The police said they are investigating the USO, because Vivas supposedly accused union reps of threatening. Continue reading

How the developing world could recover money lost to corruption

This is fascinating. What if governments around the world took this tack, suing the companies that bribed their officials? Could be a great way to get back some of their losses.

Petroleos Mexicanos, Mexico’s state- owned oil company, filed a $1.5 billion lawsuit against Siemens AG (SIE) and South Korea-based SK Engineering & Construction Co., claiming the companies bribed Pemex officials to win and keep refinery construction projects.
Siemens, which in 2008 paid $1.6 billion to settle a bribery investigation by the U.S. Securities and Exchange Commission, conspired with SK Engineering and a joint venture partner to bribe Pemex officials while bidding on a refinery modernization project in Mexico’s Cadereyta region, the oil company alleged in a complaint filed yesterday in Manhattan federal court.
The contract was awarded to the joint venture in 1997, according to the complaint. The defendants later bribed Pemex officials to keep the contract, when the project was plagued by cost overruns and disputes over the work, according to Pemex.
“Plaintiffs suffered millions of dollars of harm from the selection of an inadequate contractor, the acceptance of harmful contractual terms, and the acceptance of significant cost overruns,” Pemex said in the complaint.

More here.

Interesting long English-language blogs on Venezuela oil

Open Oil, a consultancy that promotes transparency in the oil and gas industry, visits Venezuela and makes some quick observations. Pretty observant article, though I don’t give much care for “political harassment” as a reason for the lack of oil-related activism in Venezuela. I think the people with education are just too busy living or leaving. But whatever, go take a gander. It’s amusing to see the gap between Venezuelan kleptocracy and a European’s concerns about transparency, open contracting, and the finer points of avoiding conflicts of interest.

Oil really runs in the veins in Venezuela, not just as the century-old beating heart of the economy but as something that has truly suffused the consciousness of the Venezuelan people. But while there is chatter around kitchen tables, this noise is not replicated and amplified in civil society organisations, either national or international. Don’t expect to find here the armies of transparency activists, conferences, workshops and eager chasing of international transparency standards you might encounter in Peru. It may be a crude measure (pun only partially intended) but if we look at the World Bank’s GOXI project (which brings together together those with an interest in governance of the extractive industries across the globe) the Peru-based ‘Goxians’ number 21 (in a country with 0.1% of the world’s oil reserves and a mining sector than represents 63% of export revenues), Ecuadorian Goxians (0.4% of global oil reserves, and 50% of export earnings) number 9. Even in Colombia, where the transparency debate is very much in its infancy, 5 brave souls have signed up. Yet in Venezuela, holder of 17.9% of the world’s petroleum reserves and where oil represents 94% of export revenues, there is not a single ‘Goxian’ to be found.

Take a read.

Also, the always interesting Tom O’Donnell is starting to write about what Venezuelan presidential succession could mean for Venezuelan oil. Personally, I started a post on the topic and it ended up pretty boring: I say nothing will change for at least a year even if Pres. Chávez dies. In fact I would expect quicker changes in the oil industry if he remains in power than if he hands power over. He’s the only person who could raise gasoline prices, reduce the PDVSA payroll or ease the tax regime without having to face holy hell from the public. But hey, that’s just my take. Here’s Tom!

Colombia: Houston American keeps on sliding

I only wish I could have been bothered to write about this company when I first heard rumblings about it a few years ago. This is some good reading, as is this lengthy, smart take-down. From the older story:

A third member of Houston American’s five-person board, Edwin C. Broun III, was described in court documents last year as suffering from alcohol-related brain damage that could affect his ability to “process information and make sound decisions.” The filing, submitted in his defense, characterized him as a recluse who slept all day, drank all night and hadn’t opened his mail in two years.

Gosh. Stock now at 22c, down from 55c earlier this week. Gosh. And here you thought the drop from $20 to $1 meant the short was over.

Screen Shot 2012-12-13 at 8.35.18 PM

Here’s the probable reason for this week’s drop:

On December 10, 2012, Houston American Energy Corp. (the “Company”) issued a press release announcing that the Company had received notice from SK Innovation, operator on the Company’s CPO 4 Block in Colombia, that it intends to plug and abandon the Zorro Gris #1 well. Following completion of the abandonment of the well, the drilling rig will be released. SK Innovation is currently in the process of acquiring its second proprietary 3-D seismic shoot on the CPO 4 block (approximately 135 square miles), which is anticipated to be completed in 2013. The Company is currently evaluating its future plans and alternatives regarding the CPO 4 block. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1.

Bummer dude.