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Now turning to Venezuela and possibly the end of an era this weekend President Hugo Chavez said his cancer has returned.
And for the first time he publicly talked about the end of his rule asking supporters to back his vice president that's Nicholas in the door -- And as well as oil minister announced the last OPEC meeting that the country now has the largest oil reserves in the world.
So wouldn't adapt that Chavez have a need -- impact in the global oil market with me now is John Kingston lots global director of news John welcome back to the show.
This -- -- and should I mean we've been following this for a long time but this I mean it's very serious emergency surgery.
It's his third surgery he never talked about what -- kind of cancer he has.
But at this point it's gotta be very serious.
I think that we can assume that the -- as there is almost over and has a colleague of mine said.
It sort of -- I heard you refer earlier to -- that setting up Chris sort of uncertainty in the market.
You know Euro was little better with the crazy that you do know than the one that you don't so what the future holds and there could be some sort of big sort of civil -- not a civil war.
But -- fell for a long time that the biggest risk in oil markets would be precipitous collapse of the Venezuelan industry.
And you hate to think that the death of mr.
Chavez would set that off but.
Had a -- of the state oil company has been essentially guided by Chavez and you can hold together without any sort of leadership and also it's it's a scary situation.
I mean I went down to -- as well effort OPEC meeting and it was pretty much had.
A meeting by gunpoint I mean even as media we were led around with machine guns basically trained on us the whole time -- the whole country was very much in lockdown -- -- probably got worse now.
And so what does that mean if the person behind all that is suddenly gone it seems like.
It would create quite a backyard mean he's speaking out for his vice president but who -- Well let's talk about let's compare -- -- Libya.
In Libby about the only institution that made sense that worked like a normal world institution would work.
Was the state oil company which was known as an -- national oil company.
In Venezuela it's completely different.
Head of us is simply an -- -- Hugo Chavez so how does the Venezuelan industries stay together how does a move forward when it has become so completely politicized.
The Libyans have done very well they've come back nicely.
On their productions about where was before but they did have that institution that sort of hung together and they think they're not gonna have that in Venezuela.
And at the same time no one can ignore this countryman of the last OPEC meeting -- -- Ramirez.
The minister from from but as willow stood up and said we now have the world's largest oil reserves backed by BP.
You know is saying that they have more than Saudi Arabia and the -- but a lot of those.
-- sort of oil -- -- very heavy reserves you know -- an API gravity of the you know six which doesn't mean much to most people but it's almost like guitar.
So extremely high cost of production.
The fact is.
If they had gone through with the reforms that were put into place let's say in the mid ninety's under the leadership of -- and -- Tuesday they probably be producing 3.5 three point six million barrels day.
Instead they're producing by our estimates in the estimates of most maybe about 2.3 million barrels a day -- tell the world they're producing two point seven.
Nobody believes them so you can see just the impact.
Of Hugo Chavez he has just -- -- this industry out so you really have to think this would be a better day for Venezuelan oil but it could be pretty rocky getting there.
It just for comparison I -- Saudi Arabia is that five to six times that output or 200 day at least vs you know and they're saying now they have more reserves Saudi Arabia really disputes that has kind of like talking about the US reserves of of -- oil -- out -- the -- -- there in this trillions of barrels but -- insanely expensive to produce yeah they're very water intensive.
You can count on but you know yeah really stretched to counts of giving the bottom line I mean if he.
-- What happens to oil the next stage of how nervous are the markets how big of the deal -- -- That's good question I think than -- the markets would have a reason being nervous and I tend not to think that way but I do yeah.
I do think given their very calm guy about -- you know here right now and I do think that given that I think compelled to head of us is held together by spit and bailing wire and a whole lot of -- beast ism that there's a danger now -- on the other hand.
-- some of the people who are going to be the most scared of the Chinese who get like half million barrels a day of oil for loans.
The Cubans who get it essentially for free if they've got to be really worried but I I've always thought that the Venezuelan output was.
Kind of always hanging by a thread and and even the death in the short term -- I was would fix that it's going to be fascinating to why option wow -- John Kingston thanks as always terrific right time.