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Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Crude Aid: As Global Oil Demand Tightens, A Big Producer Has Own Agenda

  • Summary: Venezuela's state-run oil company, PDVSA (pronounced peh-deh-VEH-za), has seen output reduced to just 1.6 billion barrels a day from a high of nearly 3 billion a day in 1998. The reason: Venezuela's flamboyant leader Hugo Chávez. Since taking power in 1999, the world's third largest oil & gas exploration and production company has been forced to spend upwards of 10% of it's annual budget on social projects -- cutting heavily into exploration and improving an outdated infrastructure. For example, the company spent just 60 million on exploration in 2004 compared with 174 million just three years earlier. Chávez has used the company's social spending to boost his own approval ratings to nearly 60%, at the same time cuts in the company's production have meant a 1% reduction overall on the world oil supply, a lot when you consider the current sparsity of crude around the globe.
Source: Hugo Chávez' Reforms Mean a Severe Reduction in State-Run PDVSA's Daily Output