Alejandro Velasco

Now Chávez has control over the military, control over the national oil industry, international credibility, democratic credibility, and control over the Congress, just at the time when oil prices are hitting their peak.

Just an immense amount of power.

It's complete power, is what it is.

It is total power, which eventually will be the Achilles heel and the reason why Chavismo fails.

So it was a much more contentious nationalization process, not only because of the finances, but because of the implication that now foreign oil companies are no longer partners in Venezuela's oil industry.

Now, if anything, we are clients of Venezuela's oil industry and on their terms.

And so the ones calling the shots are not just the oil industry executives.

It is, in very important ways, the whims of one person, Hugo Chavez.

The major problem is that once you nationalize, you, of course, take complete ownership over the profits.

But unlike in a process of privatization,

cooperation with private partners or contracting, you now assume all of the risk and all of the investment costs as well, which also imply, of course, maintenance, upkeep, improvements, et cetera, et cetera, right?

Now, again, in context of high oil prices, you can possibly do this, but because of the absence, number one, of accountability, right?

No institutional accountability.

And also, because of the stated project of, we're going to use literally the oil wealth and redistribute it as much as possible into the population, the intensives are set such that the primary focus of the oil industry is not reinvestment in itself, but reinvestment in the nation as a whole.

Now, you think...

that's not a problem.

If it's the nation's oil, shouldn't that be the end goal of a national oil industry?

And I think the answer is yes, but to a point.

Not at the sacrifice of the industry itself.

And so what happens to the oil industry?