April 29, 2006

Weekend Question 1: When Is Someone Going to Criticize Venezuela’s Oil Greed?

Filed under: Business Moves,Economy,Taxes & Government,TWUQs — Tom @ 9:27 am

The Free Market Project notes the typical characterization of shareholder-owned oil companies as sinister, while totally overlooking what near-dictator Hugo Chavez does with his country’s oil profits:

While ABC’s April 26 “World News Tonight” opened with an attack on the success of petroleum companies – anchor Elizabeth Vargas noted “overflowing profits for the oil industry as Americans struggle to pay rising prices at the pump” – it also featured a story that just briefly discussed how Venezuelan dictator Hugo Chavez is pumping some of his billions in oil money into undermining American interests.

The same night on the “CBS Evening News,” correspondent Byron Pitts slammed American petroleum companies as harming consumers and even their own gas station owners, though the Citgo station owner he featured worked for a company owned by Venezuela.

Over on ABC, correspondent Dan Harris was more realistic. “Before you get too steamed at the oil companies, take a hard look at oil-producing countries such as Saudi Arabia, Kuwait, and Venezuela,” Harris said.

“It’s the producers,” of oil, countries like Chavez’s Venezuela, “that make the lion’s share of the profit,” Thompson Financial research director Michael Thompson told ABC News.

Harris informed viewers that Chavez’s regime stood to gain $34 billion from oil sales this year, money which helps the country’s dictator “to support anti-U.S. politicians across Latin America.”

….. Pitts didn’t explain that it’s the anti-American Chavez who is getting “big and fat” from Citgo sales. Citgo, unlike publicly-traded corporations like ExxonMobil (NYSE: XOM) or BP (NYSE: BP), is “a wholly-owned subsidiary of Petroleos de Venezuela, S.A.,” and therefore has “no publicly-traded equity securities,” according to the company Web page.

In other words, all of Citgo’s profits are Hugo Chavez’s to essentially do with as he pleases, while shareholder-owned oil companies pay out dividends and are expected by their owner to invest their profits wisely to produce more wealth.

Tell me which set-up is more greedy again?

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