Tuesday, June 26, 2007

Capital, Workers, Foreign Investment Getting Out

I had a post yesterday about capital flight from Venezuela to the U.S., especially Weston ("Westonzuela"), Florida.

Today's WSJ has two related articles, the first about Venezuelan oil workers fleeing to Alberta, Canada:

"Frigid, remote Alberta has become one of the world's fastest growing enclaves of Venezuelans, rivaling such warm-weather spots as Weston, Fla., outside Miami; and Sugar Land, Texas, near Houston. There are now 3,000 Venezuelan-Albertan families, up from 800 or so last year. Some Albertans now call Evergreen, a Calgary housing development, "Vene-green" because of the 100 families who have bought split-level homes there, and dangle Venezuelan flags from car rearview mirrors.

The loss of so many skilled oil workers has hit PdVSA (Venezuela's state-owned oil giant) hard. Since Mr. Chávez took power in 1999, Venezuela's oil production -- according to U.S. government statistics -- is down to 2.4 million barrels a day, from 3.1 million barrels a day, despite high prices."

Also from
today's WSJ, an article about U.S. and other Western private oil companies fleeing Venezuela:

"U.S. oil company ConocoPhillips plans to walk away from its massive Venezuelan investments rather than agree to a government takeover of the assets, a person familiar with the talks says. Five other Western oil companies face the decision of whether to accede to Venezuela's demands and turn over a controlling stake or walk away including Exxon Mobil, BP and Chevron.

It is unclear how the other companies will respond, though industry observers have said ConocoPhillips's decision will increase the likelihood other U.S. companies may follow suit."

Bottom Line: It can't be a good sign when you've got capital, skilled workers, and foreign investment all fleeing a country at the same time, can it?

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