Venezuela Strike Part Of Global Struggle Over Oil

by Humberto Marquez

"I can't say that there is an international arm in this criminal sabotage of our (oil) industry," Ali Rodriguez, the president of the state oil monopoly Petroleos de Venezuela (PDVSA), told IPS. "But the backdrop is the debate between the countries that have the natural resources and the major consumer nations."

Rodriguez was referring to the general strike, which continues to be partially adhered to throughout Venezuela. The stoppage was declared on Dec 2 by Venezuela's leading business and labor organizations, as well as oil industry executives and managers, to demand the resignation of President Hugo Chavez.

The country's oil production plunged from 2.8 million barrels a day in November to between 200,000 and 700,000 barrels a day this month, while exports shrank from 2.4 million barrels a day -- 1.5 million of which go to the United States -- to less than 300,000.

In the midst of the daily protests staged by the opposition and the counter-demonstrations held by supporters of the Chavez administration, the drop in oil production has had a severe impact on internal supplies of gasoline and cooking gas.

Long lines of cars queue up at all hours outside the service stations while the government fights to get the oil industry going again.

"We are going to win this battle against the traitors to the fatherland," said Chavez in his regular radio program, which was broadcast this week from a pumping station that was filling trucks with imported gasoline that just arrived from Brazil.

Rodriguez, a man who speaks unhurriedly and walks with a cane, said emphatically that "In January we will once again be producing more than two million barrels a day, and we will meet our export commitments."

The president of PDVSA commanded leftist guerrilla troops in the 1960s and 1970s, was a left-wing parliamentarian in the 1990s, and has served as energy minister and secretary-general of the Organization of Petroleum Exporting Countries (OPEC) since Chavez came to power in 1999.

A few days after the coup d'etat which overthrew Chavez for two days in April, the government called on Rodriguez to take over the presidency of the oil company, leaving the post of secretary-general of OPEC in the hands of Alvaro Silva.

"In April, the conspirators were backed by part of the armed forces. But since the military is now maintaining order and respecting the country's institutions, they are waging their last great battle through this oil industry strike," said Rodriguez.

"Let's not fool ourselves," he added. "There is commercial and other activity in the country. This is basically an oil strike, which is failing, and which shows that those who want to use petroleum as a political weapon are being defeated."

In the international arena as well, "there is a growing understanding that this is the situation, as shown by the contacts between the members of OPEC, the world's main producers, and the International Energy Agency (IEA), which groups the big consumer nations," said Rodriguez.

OPEC, of which Venezuela is the only Latin American member, has expressed its solidarity with the Chavez administration, while Brazil and Trinidad and Tobago have sold Venezuela gasoline.

The international community at large has thrown its support behind the efforts of Organization of American States (OAS) Secretary-General Cesar Gaviria, who is brokering the talks between opposition and government delegates seeking an electoral solution to the crisis.

What is occurring in Venezuela "is part of the conflict between the nations that own the natural resources and the consumer powers over the three main areas in the world with petroleum reserves -- the Persian Gulf, Central Asia and the 'Bolivarian belt', all of which are plagued by political conflicts," analyst Victor Poleo commented to IPS.

The "Bolivarian belt" is made up of "the deposits of light and heavy crude, and natural gas, stretching from the northeastern coast of Venezuela to Bolivia, passing through Colombia, Ecuador and Peru" -- countries that in the early 19th century were made independent by the armies commanded by Simon Bolivar.

"There are gas reserves in the countries along the Bolivarian belt, light petroleum in Venezuela, Colombia, Ecuador and Peru, and heavy crude in Venezuela and Ecuador," said Poleo.

The world's declared oil reserves amount to 1.05 trillion barrels, 65 percent of which are found in the Middle East. But the Orinoco basin in Venezuela has reserves of 1.2 trillion barrels of heavy crude, of which 270 billion can be extracted by known methods -- an amount nearly equivalent to the Saudi reserves of light crude.

Due to the major investment that would be needed to mobilize such large volumes, "20 years ago, the global oil industry basically decided that the funds generated were to be rechanneled into the oil industry," said another expert, Pablo Hernandez.

According to that system, "of the two trillion dollars a year generated by the oil industry, more than half goes to industrialized consumer nations, one-fourth is reinvested in the oil industry, and the rest -- a smaller and smaller amount -- goes to producer nations," he added.

"For that reason, oil managers in Venezuela, in line with the global tendency, want the industry to be self-governing, which would entail respect for the merit-based system, the privatization of PDVSA, Venezuela's withdrawal from OPEC, and the reinvestment in the oil industry of the funds that are generated," said Hernandez.

The Venezuelan government's media spots accuse the striking oil company managers of dedicating 36 billion of the PDVSA's 53 billion dollars in earnings last year -- 67 percent -- to operating costs, compared to the 17 percent that went towards operating costs at the time the industry was nationalized in 1976.

But former energy minister Humberto Calderon, a Chavez foe, said "the government wants to dismantle the industry and put an end to its independence, depriving it of financial and managerial resources in order to carry out a 'revolutionary project' that is the real Trojan Horse of the transnational corporations."

The heads of the trade unions of PDVSA managers and employees, Juan Fernandez and Horacio Medina, reiterated that "we work with pride in a state-owned company, which we defend, because it belongs not to the government but to all Venezuelans."

"When we have proposed the sale of a portion of the shares of PDVSA, we have not done so in order for the company to be privatized, but to increase the value of a firm that is worth more than $100 billion (it is the largest in Latin America) and thus enable it to back Venezuela's credit," former oil industry executive Alberto Quiros commented to IPS.

Rodriguez insisted that "I have no elements to point to an international arm in this sabotage, but there is a certain alignment between the arguments voiced by spokespersons in Venezuela and foreign interests, with their demands for us to leave OPEC, privatize PDVSA and produce oil at maximum capacity to annihilate (OPEC's) price defence scheme."

Oil prices are at the highest level seen in two years, due to the conflict in Venezuela and the prospect of a U.S. war on Iraq -- several dollars above the upper limit of the price band adopted several years ago by OPEC.

On Monday, the benchmark North Sea Brent traded in London at $30.85 a barrel, 69 cents up from Friday's price, and West Texas Intermediate was trading in New York at $33.45 a barrel, a 73 cent rise from last Friday's level.