Question

The second weekly assignment for the course is an open forum. In this assignment you task is to find an economic news topic and summarize the article in your post. The purpose of this assignment is to give you a free hand in the subject you wish to discover. The news article can come from any widely known news site such as BBC, Bloomberg, CNBC, Fox Business, MarketWatch, Wall Street Journal, etc. If this does not offer you enough options, I post material on my class Facebook site @JavaJournalist or javajournalist1 at twitter. The other reason for this assignment is to hopefully get you to read the business news once a week.

A minimum of 150 words (about two paragraphs) to a maximum of two page in length, post an economic news topic you find interesting. After reading a few chapters begin searching for news associated with the course. View this as an assignment to discover a topic related to the text or something you believe is interesting. This assignment is designed to give you a free hand to apply the text material to your life. One option to a great post is to tie the topic to a personal experience or a strong view, such as the minimum wage, trade talks, companies merging, commodity prices (the price of oil falling).

The initial post is due by Thursday 6:00 PM. Reply to ONE post for a possible 15 Points (see the description above).

Answer 1

Irrespective of the political settlement Venezuela have miles to go before the country stables itself in the matter of falling prices for The Venezuela’s oil industry. It is not good to overlook situations in Venezuela like : the quick ouster of President Nicolas Maduro; period of civil unrest; or the current involvement of the military within the county and hope Venezuela will evolve in near time.One thing is for sure that the damage inflicted on the country’s oil sector by so many years of under-investment and mismanagement, compounded by the underuse of large parts of the skilled workforce, is going to take a long time .

For instance If we want to compare things that might evolve in the Venezuelan oil sector in the near time then we may we may learn from Libya’s recent past, or Iran’s experience after the Islamic Revolution of 1979.More than seven years after their losses, oil production in Iran and Libya had still not recovered fully. In both countries there was an immediate downfall in production, with output levels around half what they had been before the revolutions. Seven years after the fight, output had still not recovered fully.

Iran’s oil industry was affected by the post-revolution government, with technologies replaced by political appointees with no, industrial experience. In Venezuela that has already happened. President Hugo Chavez purged technicians who were critical of his socialist revolution. His successor, Maduro, installed Major General Manuel Quevedo, a military man with no industry expertise, to run the state oil company and simultaneously head the country’s oil ministry in 2017.

In Libya, fights among militias and a loss of government control over large parts of the country have affected the recovery. Theft, hostage-taking and closure of pipelines and production facilities continue to delay restoration of oil field and transportation infrastructure. While this not the case in Venezuela yet, the country’s oil infrastructure is a concern. Venezuela has to climb everest to restore its oil industry to its former level.

Before Chavez took charge of the oil company office, in February 1999, the company had headed for nearly five years as the envy of the rest of OPEC. Its production capacity was in a boost for about 3.3 million barrels a day, upto nearly 30 percent since 1994. It had connections with overseas refineries to secure market access and was in the process of high-value products from its heavy crudes. The parts of Venezuela’s vast reserves had been opened to foreign and domestic investors, and there were plannings to raise production capacity as high as 6 million barrels a day.Today, its production has gone down to one third of what it was before. PDVSA’s overseas refineries is vanishing with its domestic plants being for its 20 percent of capacity. The joint ventures developing the heavy oil projects have failed to build the expensive upgraders to meet output targets.

Venezuela's oil production has dropped half in 3 years and capacity is a third of what it was before.

It will take more than what is being anticipated for Venezuela's oil flow again. Measures to solve issues of toxic spills its infrastructure may need to be replaced before production can increase.

Venezuela contributed more than any other country to OPEC's output cuts introduced in 2017.The country’s older oil fields in and around the country need constant supervision, but thecompany is struggling with the man power. A change of government can only at instance generate jobs. Workers in Venezuela worries that there may also be irreversible damage to the oil reservoirs, and that production in western Venezuela may never recover.