[Rafa]

And think that the US army is composed of a quite high percentage of people from latinamerican origin; how would they feel if ordered to invade and do war crimes against their own?

As long as they weren't fighting against their own country, I think most of them would be OK. The US hasn't had any major problems with their operations in South America so far, have they?

The last big scale military operations against LA countries were in the 1940s-1950s; at that time the ratio of LA soldiers in US army was quite low.
Things have changed.
Military operations against LA since then have been quite small, involving only a limited number of soldiers, they could be selected adequately; plus the action was short in time so soldiers don't have much time to think.

But an attack against Venezuela, Boliva or Cuba would involve even more soldiers than attack of Iraq; that is hundreds of thousands of soldiers; there would be a lot of soldiers from LA involved in such case, it would be a big problem to handle.
And Iraq in 2003 almost hadn't an army; Venezuela, and more so Cuba, had quite strong anti-aircraft power and even modern and efficient air forces; while Iraq was (and still is) alone, with no help from other countries, there is growing strenghtening of LA countries together.

No, an US attack is very unlikely, it would be an incredibly stupid thing to do; and if ever happens, it's likely that the US will be defeated (in order for the US to win, it would require that US people stick together and accept a lot of sacrifices and suffering; they could be able of a that in case of being attacked, in case of needing to defend themselves; but I don't think it will happen in order to attack somebody else that did them no wrong, and all that for the only benefit of corporations)

[frankthetank]

Read an article from here

With the election of the coca-growing street activist Evo Morales as the Andean nation's first Indian president, the prospect of Bolivia profiting from South America's second largest natural gas reserves after Venezuela is more unclear than ever.

They're wondering just what nationalization will mean for a president-elect who admires Fidel Castro's communist regime and blames unfettered capitalism for the deep poverty that Bolivia's majority Indians have lived under for nearly two centuries since the nation gained liberty from Spain. The country's Gross Domestic Product was $22.3 billion in 2004, about the same as Afghanistan and Angola.

Of course the dictator Chavez comes up!

Of the four major firms in the Bolivian gas business, only Petrobras is state-owned. And while Morales didn't mention state-owned Petroleos de Venezuela SA by name, he is a big fan of Venezuela's populist leader, Hugo Chavez -- who promised to share the good news of Morales' victory with Castro after reaching the president-elect by phone at his family home.

Chavez has lavished petrodollars across South America, trading oil for cows with Argentina, pledging to help finance a $2.5 billion refinery in Brazil and promising to work with other nations on a pipeline linking Venezuela with Brazil, Argentina and possibly Bolivia.

But experts say Venezuela's PDVSA lacks experience in natural gas extraction. And while Venezuela is rolling in cash as the world's fifth-largest petroleum exporter, Chavez is also spending huge amounts at home to bankroll programs for the poor based on socialist ideals.

How dare he spend oil profits on his OWN people! That would be the same as an American Oil company buying food for the homeless!!!traitors!

Bolivia has proven and potential natural gas reserves of 53.3 trillion cubic feet -- enough to feed demand in South America and Central America for more than a decade. Some analysts predict the figure could climb with additional exploration.

But the foreign companies, which froze most investment and exploration in Bolivia last year because of political instability, acknowledge they have no idea what level of business they'll be doing there in the future.

The biggest uncertainty is how Morales will enforce a new law passed last May that hiked oil and gas production taxes and royalties from about 38 percent to 50 percent, a move expected to boost Bolivia's 2006 gas income to $600 million. The law also sought to force contract re-negotiations, but that element was never put into practice by Bolivia's caretaker President Eduardo Rodriguez.

Should be an intersting year ahead!

[The_Virginian]

Rafa,

The fact that the US has not been able to completely defeat the Colombian Rebels is a testimony to my contention that the Geurrilas are a force to be reckoned with.

Supply can be via air-drops, and ammo has been traditionaly supplied this way in forward bases in times of conflict.

Guerilla's win the ABILITY to have representation within a seetlement, in sense, they win. The Ballot box only makes them mainstream/ acceptable.

I agree that w/o the USSR, the agressive tactics of the US military-political alliance is making more enimies than ever...it will be hard to find strongmen who will be trators to their own, and Loyal to the USA.

[bobbyboy]

More conceptual reserves being written off:

Repsol YPF Announces 25% Reserves Reduction. Repsol YPF today announced expected downward revisions in its proved reserves of 1,254 million BOE.
· These revisions relate primarily to natural gas reserves. The majority are located in Bolivia (52%) and Argentina (41%), along with smaller amounts in Venezuela and elsewhere. The revisions were mainly driven by changes in the applicable legal framework in Bolivia, due to the new Hydrocarbon Law and greater knowledge of certain fields in that country and Argentina.
· The revisions are currently expected to result in an asset impairment charge of less than €50 million. Repsol YPF anticipates 2005 earnings to be consistent with results for the first three quarters. Repsol YPF management has taken a number of steps in the past year to enhance reserves booking procedures, including the creation of an independent Reserves Control Group separated from the business units.
· The Audit Committee was assigned last April the oversight responsibility for reserves control, with the Reserves Control Group reporting directly to the Audit Committee.
· An independent review into the circumstances of the revisions is being conducted by the Audit Committee.

Repsol Shares have been suspended expected to crash 20% today. Who will be next?

[Novus]

It is not looking good for the cornucopian view point. Venezuela might be next.

[elroy]

Found a HTML link here: Marketwatch

[shakespear1]

I am not surprised that the "Che's" have done this. It's in the blood.

[rockdoc123]

It is not looking good for the cornucopian view point.

More conceptual reserves being written off:

Do you guys actually ever read the articles you refer to??

Energy group Repsol YPF has slashed estimates of its gas reserves and planned production in Bolivia, owing to a tax increase last year.

and:

Repsol said that 52.0 percent of the reduction of its reserves, or 659.0 million barrels of oil equivalent, related to Bolivia, owing to "uncertainty" arising from a change in tax made in May of last year.
The law was introduced in Bolivia before the recent election of Morales, the first indigenous Indian president, and raises the extraction taxes and royalties on hydrocarbons to 50.0 percent.
The company said on Thursday: "Some (gas) fields and projects are no longer viable from a commercial point of view."

This has absolutely nothing to do with Peak Oil or conceptual reserves. The oil is still there....no doubt the URR for the fields are as accurate as can be. What has changed is the share of those reserves companies such as Repsol who have production sharing agreeements can report. As an example lets say that in Bolivia last year Repsol was producing 200 Kbpd from a 300 MMB pool, Of that let's say the government take was 55% (this is an average of the old contracts). As a consequence the amount of proven or P1 reserves that Repsol is allowed to report under securities rules is 45% or 135 MMB and the amount of production they can report is 90 Kbpd. Now in comes the new government who changes the contract structure such that the government share suddenly becomes 70%. Repsol now finds itself in the unenviable postion of having to adjust their net reserves down by 15%....so now their bookable proven reserves becomes 90 MMB and the production they can report becomes 60 Kbpd.
Nothing different has happended to the field all that has happened is Repsol gets less oil and the Bolivian gov't gets more. The drop in proven reserves is an accounting adjustment and nothing more. Serious business for Repsol and their investors....doesn't mean diddly to Peak Oil.

[bobbyboy]

This has absolutely nothing to do with Peak Oil or conceptual reserves. The oil is still there....no doubt the URR for the fields are as accurate as can be.

I suggest that in addition to media reports you read the press release (which I quoted from) straight from Repsol themselves. The media have spun this to blame it on the Bolivians and deflect blame from Repsol. Here:

Bolivia

San Alberto and Sábalo

In the San Alberto and Sábalo fields, the downward revision in proved
reserves is mainly due to the following reasons:
o Although these fields have a short production history, the decline in
pressure in 2004 and 2005, together with new volumetric
calculations, has led to a reduction in the estimated hydrocarbons in
place for the purpose of estimating proved reserves.
................
o There has been a reduction of 526.7 million BOE.

Río Grande

Production performance following workovers that was significantly lower
than expected has led to a downward revision in the Río Grande and other
fields in this region of 61 million BOE.

ARGENTINA

Loma La Lata

As was previously disclosed to the market, a downward revision of proved
reserves in the amount of 72.6 million BOE was recorded as of December
31, 2004. The decline in pressure observed for this field in 2004 and 2005
indicated that a portion of the initial gas in place (IGIP) could not be
recoverable with reasonable certainty under present technical, economic
and operating conditions. In particular, the lack of balance between the
pressures detected in the various layers and zones of the field indicated a
limited interconnection between these layers and zones.
Commercial exploitation of those gas volumes without a connection to the
producing zones of the field will require the implementation of nonconventional
recovery methods, which would require pilot testing in order
to support the classification of the volumes as proved reserves.
All these reasons have lead to a downward revision of 252 M boe in proved reserves.

Chihuido de la Sierra Negra

Production performance of this field has been adversely affected by
multiple factors, including the effect of interrupted production in late
2004 and problems with injector equipment, which has caused a
downward deviation in short- and medium-term production estimates.
This updated evaluation of field performance has led to a downward
revision of 38.5 million stb in proved reserves.

Ramos

Balance of materials analysis incorporating the latest static pressures
observed for the field indicated a reduction in the IGIP, which in turn resulted in a downward revision of previous estimates of proved reserves
of 36.5 million BOE.

Aguada Toledo and Sierra Barrosa

This area has been used for underground gas storage during the summer
months. A reevaluation of the gas cap of the affected reservoirs has
downward revision in proved gas reserves of 22.7 million BOE.

Repsol

What has changed is the share of those reserves companies such as Repsol who have production sharing agreeements can report.

Only in Venezuela and Algeria is that the case where 52.4mboe and 17.7mboe respectively have been written down due to this.

The drop in proven reserves is an accounting adjustment and nothing more.
Serious business for Repsol and their investors....doesn't mean diddly to Peak Oil.

Its more than an accounting adjustment hence their decision to bring in independent auditors:

Since the appointment of the new senior management team, in January 2005, Repsol YPF has taken a number of steps to enhance reserves controls and procedures, including:
o Creation of an independent Reserves Control Group in order to
separate the internal reserves audit function from the business units.
The Reserves Control Group is independent of the E&P business and
reports directly to Audit Committee on behalf of the Board of
Directors.
o Assignment by the Board of Directors to the Audit Committee of
oversight responsibility for reserves controls.
o Preparation, with the assistance of an outside petroleum engineering
consultant, of a new internal Reserves Reporting Manual.
o Company-wide training in the new Reserves Reporting Manual.
o Implemented a triennial plan for external audit of the reserves.
o Commissioned audits by two external petroleum engineering firms of
the San Alberto and Sábalo fields (Bolivia) and Loma La Lata
(Argentina)

I agree this is not directly a peak oil issue more a peak gas issue as 71% of reserves writed down were gas nevertheless it still raises serious issues over reserve accounting at IOCs where manipulation of the data can be hidden easily due to their large size.

[seahorse2]

Looks like Bobbyboy did read the article.

[rockdoc123]

I suggest that in addition to media reports you read the press release (which I quoted from) straight from Repsol themselves. The media have spun this to blame it on the Bolivians and deflect blame from Repsol.
Bolivia

San Alberto and Sábalo

In the San Alberto and Sábalo fields, the downward revision in proved
reserves is mainly due to the following reasons:
o Although these fields have a short production history, the decline in
pressure in 2004 and 2005, together with new volumetric
calculations, has led to a reduction in the estimated hydrocarbons in
place for the purpose of estimating proved reserves.
................
o There has been a reduction of 526.7 million BOE.

Yeah well maybe you should quote it exactly as what you put down is completely misleading, the actual quote is:

In the San Alberto and Sabalo fields, the downward revision in proved reserves is mainly due to the following reasons:
- although these fields have a short production history, the decline in pressure in 2004 and 2005, together with new volumetric calculations, has led to a reduction in the estimated hydrocarbons in place for the purpose of estimating proved reserves.
-at the present time, there is inadequate legal certainty to support a commitment to new investment in these fields. Implementing regulations under the Hydrocarbon Law have not been pulished. These regulations will impact the profitability of the new investments necessary to develop future facilities.
-similarly, the change in the legal framework has created commercial uncertainty with respect to the execution of new contracts including contracts of gas to the Brazilian market after the existing contract expires in 2019. Although there may still be commercial justification for these future contracts, the legal uncertainty, together with the need to make additional infrastructure investments in order to supply the additional gas volumes brings the need to de-book the proved reserves associated with these additional sales.
-there has been a reduction of 526.7 million Boe.

Although they don't specifically say how much is due to changing economic circumstances the press release (by the way it was from oil and gas international which is probably one of the most reputable oil and gas news reporters as they actually talk to the press release issuers for additional information) speaks to slightly more than half of the total adjustments.

nevertheless it still raises serious issues over reserve accounting at IOCs where manipulation of the data can be hidden easily due to their large size.

how do you get that from what happened.....economic conditions changed, fields with limited production saw pressure decreases....this is changing circumstances. Every year IOC's (publically traded ones) have portions of the reserves audited by third parties..occasionally this requires write downs and occassionally allows for upgrades. If suddenly the Bolivian government came out with improved fiscal terms Repsol would be able to recapture those proven reserves.
My point is that the portion of the write down associated with changing economics does not affect URR....the Bolivian gov't can go and get it any time they want regardless of how economic it is to do so for Repsol.

[bobbyboy]

Yeah well maybe you should quote it exactly as what you put down is completely misleading

Fair point that was misleading and I apologise .

Although they don't specifically say how much is due to changing economic circumstances the press release (by the way it was from oil and gas international which is probably one of the most reputable oil and gas news reporters as they actually talk to the press release issuers for additional information) speaks to slightly more than half of the total adjustments.

According to the CEO in the conference call the split of the 1254mboe write down is split "50/50" between technical and non-technical factors.

nevertheless it still raises serious issues over reserve accounting at IOCs where manipulation of the data can be hidden easily due to their large size.

how do you get that from what happened.....economic conditions changed, fields with limited production saw pressure decreases....this is changing circumstances. Every year IOC's (publically traded ones) have portions of the reserves audited by third parties..occasionally this requires write downs and occassionally allows for upgrades. If suddenly the Bolivian government came out with improved fiscal terms Repsol would be able to recapture those proven reserves.

See above on how much could be rebooked. According to Repsol 53% of the reserve base has been audited in this review. The remaining reserve base is not considered likely to be affected. Thus of what has been fully indepedently audited proven reserves have been cut in half . As for why I consider this serious, historically IOCs understated reserves usually just initially booking the amount needed for the field to be economically viable and developed eg Prudhoe Bay. Yet now we have a case where due to shrinking reserves (under 20% RRR in 2005 for Repsol according to the CEO) a company has initially overestimated proven reserves. I would put it to you that this reversal of circumstances implies manipulation of the data is needed for financial reasons (higher stock price etc) in an era of insufficient discoveries to maintain organic production growth (projected production has been cut by 10% out to 2009 as a result of this revision 1.18mboed vs 1.3mboed previously).

My point is that the portion of the write down associated with changing economics does not affect URR....the Bolivian gov't can go and get it any time they want regardless of how economic it is to do so for Repsol.

The hydrocarbon law thats reduces investment implies a lower URR as gas field's general sharp production decline from their plateau indicates field life would be shorter so the majority of the 526.7mboe in the Bolivian case may not be recoverable.

[cudabachi]

Just saw that on CNBC but haven´t found a news story on the net yet. Anyone else?

Seems to be the trend in S. America.

[Shadizar]

Here's something from Yahoo News about it.

It only mentions the natural gas industry. This was pretty hard to find...

-Shadizar

[jaws]

I believe those deposits are in an area hostile to the government. It could turn into another nasty civil war.

[cudabachi]

You´re right Shadizar. I just saw another blurb on CNBC and they´re saying this particular move effects the Bolivian gas industry only.

One "analyst" said that this was not totally unexpected because the Bolivian legislature had approved this measure last year. According to this guy, today´s move is more symbolic than anything else.

Who´s next, Peru?

[Sketh]

AFX included oilfields too (so does the BBC):

LA PAZ (AFX) - Bolivian army troops took control of oilfields, officials said, as President Evo Morales issued a formal decree nationalizing Bolivia's oil and natural gas resources.

This has been on the cards for some time, but it seems to have spooked the futures market somewhat.

[DantesPeak]

This story says this is not technically an expropriation, but none the less, it appears to be a confiscation of oil and gas production.

Who's next?:(

5/1/06 Agence Fr.-Presse 18:05:00
AGENCE FRANCE PRESSE ENGLISH WIRE
Copyright 2006 Agence France-Presse

May 1, 2006

Troops take oilfields in Bolivian nationalization

LA PAZ, May 1, 2006 (AFP) - Bolivian troops took control of oilfields, officials said Monday, as President Evo Morales issued a formal decree nationalizing Bolivia's oil and natural gas resources.

The takeover of oilfields by the army's engineering corps was announced by the top military command moments after the president announced a formal decree nationalizing the country's petroleum operations.

Morales, at a May Day speech at San Alberto gas field in southern Bolivia, stated that the move would be a "true nationalization" that would help the economy and generate additional jobs in Bolivia.

The left-wing president said foreign energy companies would have to agree new contracts with the state run oil firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), within 180 days.

He said the state-owned YPFB would be responsible for all oil and production and sales, as well as prices, in the industry.

The president indicated that "only companies that respect these new terms will be allowed to operate in the country" after the 180-day transition period.

"At the end of this period, companies that do no sign new contracts will not be able to operate in the country," he added.

The deployment of troops "seeks to ensure the functioning of oil facilities to guarantee the normal supply of energy in accordance with international agreements as well as to fulfill domestic needs," an army statement said shortly after the president's announcement.

(portion of story only)
Sorry, no link.

[DantesPeak]

Interesting that they are taking away from fellow South Amercians at Petrobas:

Bolivia set to seize its foreign-run gas fields

By Hal Weitzman in Lima
Published: 1/5/2006 | Last Updated: 1/5/2006 23:25 London Time


Bolivia ordered its military to seize natural gas fields controlled by foreign investors as the 100-day-old government of Evo Morales signalled it was putting into effect a campaign pledge to nationalise the sector.

Bolivia's gas industry is dominated by international energy companies, including Brazil's Petrobras, Repsol of Spain, Total of France, and BG and BP of the UK, and the decree is the latest sign of a hardening approach to foreign investors since Mr Morales' election.

"We want to ask [the armed forces] that, starting now, they occupy all the energy fields in Bolivia along with battalions of engineers," Mr Morales said after signing an official nationalisation decree in a ceremony at a gas field in south-eastern Bolivia operated by Petrobras.

Financial Times
http://www.euro2day.gr/articlesfna/13588237/

[Rafa]

Who´s next, Peru?

Or Ecuador.
And proably Mexico too, in a not so distant future.