BP (NYSE:BP) Hands Off Babysitting Chavez to Russians

While the divestiture of BP (NYSE:BP) assets in Venezuela are part of the strategy of the oil giant to raise $30 billion to pay for mounting liabilities from the Gulf of Mexico oil spill from the explosion aboard the Deepwater Horizon oil rig, a secondary benefit comes with it: No longer having to deal with the volatile and unpredictable Hugo Chavez.

Even though BP is a 50-50 partner in TNK-BP, their joint venture with a group of Russian billionaires, they'll retain benefits of the assets, but not have to deal with, for the most part, the operational headaches that come with doing business in Venezuela.

That doesn't include the $1.8 billion BP raised from the deal to serve its liability goals.

Another nice benefit in this is if the business in Venezuela is taken over or fails for some reason, BP already enjoys the $1.8 billion that came with the deal, putting them ahead of the game.

Overall it's a smart deal for them.

Exxon Mobil (NYSE:XOM) Moves Closer to Compensation from Venezuela

Exxon Mobil (NYSE:XOM) was happy with the decision from an international arbitration panel which moved them a step closer to being compensated from the theft of their assets by Venezuelan President Hugo Chavez, who nationalized them.

At this stage, what was decided was that the process was valid and Exxon could go forward with the claims process. In other words, it dealt solely with issues of jurisdiction in the matter and nothing else.

"The message to companies facing host-state interference with their assets is clear: cases associated with foreign investors like Exxon can gain the protection of international treaty law," said James Loftis, a partner in the international litigation practice at Vinson & Elkins.

In going forward, the amount of damages, along with the merit of the claims of Exxon are still to be determined, and the next part of the process will be to determine whether or not Venezuela will have to pay Exxon for confiscating their assets held in the country.

Hugo Chavez Calling for more OPEC Oil Production Cuts

There's no doubt Hugo Chavez is mildly tolerated by the people of Venezuela, as he's taken the money from the oil industry he nationalized and redistributed it to the healthcare and education systems in the country.

Now that oil prices have plummeted, and Chavez is attempting to change the terms of being in office, he's pushing hard for oil production cuts from OPEC in order to push up the price of oil, whose demand has fallen along with the global recession. About half of Venezuelan government spending comes from oil proceeds.

Another step by Chavez which is destined to fail, is he's now reaching out to foreign investors again in order to shore up his domestic industry. But since Chavez stole the industry from major oil companies, there is no trust that once deals are made the contracts will be honored. They'd only be honored as long as the country's needs and his personal agenda was met. Once that was accomplished, we know he would once again break his word and take things back under his control.

Once a socialist always a socialist. Anyone that doesn't see that deserves to learn the hard way.

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