Posted on 18-12-2002

Oil Slippery Stuff
By JUAN FORERO, NYT, 17 Dec02 (Photo shows Venezuelan President Hugo Chavez)

Intro by Alan Marston: Not mentioned in the New York Times article below is
the fact that a pro-people government of any flavour is anathema to the
USA, always has been. However if one also factors in that Bush is from an
oil dynasty, that the USA relies on imported oil much of which comes from
Venezuela, that the USA has created instability in the Mid-East oil supply,
that the USA will intervene anywhere anytime its perceived interests are
affected by local politics; then one must be deeply suspicious that the USA
is involved in the `uprising' in Venezuela. If Chavez wins out, this will
be a very very significant defeat for the ultra's currently in the Whitehouse.


CARACAS, Venezuela, Dec. 16 — As planning manager for Venezuela's most
vaunted company, Petróleos de Venezuela, Juan Fernández was known for
caution and restraint as he plotted the state oil giant's financial future.
Now, the unruffled American-educated economist is plotting a different kind
of future for the company: making sure its taps stay shut long enough to
force President Hugo Chávez from power.

Charging that Mr. Chávez's left-leaning government is leading Venezuela to
ruin, Mr. Fernández, 47, and a vanguard of white-collar rebels have vowed
to remain true to a two-week national strike that has paralyzed oil exports
from the world's fifth-largest supplier, which provides 14 percent of the
oil used in the United States. "I am not thinking of the risks," Mr.
Fernández said in an interview at his home. Even as he vowed to stay off
the job, the government said Mr. Fernández and four other leading Chávez
opponents in the company had been dismissed. "This is my priority," he
said. "This is what has become of my life."

It is also a struggle for the life of Venezuela. When Mr. Chávez won power
here in 1998, he pledged to use the oil revenues as his most powerful tool
to remake a country with glaring disparities between a European-descended
upper class and the vast majority of Venezuelans and Chávez supporters, who
are poor and dark-skinned. "It cannot be seen as a state within a state,"
the president said of the oil company. Since then, Mr. Chávez's policies
have divided Venezuelans as never before, and observers of the two-week
political standoff now warn that whoever controls the $46 billion oil
company will gain the upper hand and may well end up controlling the
nation. "Oil is everything because that's how you control the money," said
Roger Diwan, managing director at the Petroleum Finance Company, a
Washington consulting company. "If the government succeeds in getting back
the oil on line, they would have won. The question is, Is that possible at
this stage?"

Already the strike, now in its 15th day, has severely debilitated the oil
industry. Production is down 70 percent, to about one million barrels a
day, with losses for the government estimated at $350 million a week.
Coupled with the threat of war in Iraq, the strike has driven up world oil
prices to a two-month high. "It is the first time that Venezuela fails in
its policy of being a secure and trustworthy supplier of petroleum," Roy
Chaderton, Venezuela's foreign minister, said in an interview. "We consider
that grave for Venezuela."

After gaining the presidency, Mr. Chávez, a pugnacious former army
paratrooper, quickly set about rewriting the Constitution and loading a new
Congress and Supreme Court with his allies. While his policies have created
a host of powerful enemies from the influential middle and upper classes,
the most potent spring from the white-collar work force at Petróleos de
Venezuela, known throughout the oil industry as Pdvsa, pronounced
peh-deh-VEH-sah. To the government and its supporters, Mr. Chávez is simply
trying to manage Petróleos de Venezuela for the good of a country that,
despite its vast oil wealth, has been mired in poverty. But to the
executives and office workers at Petróleos de Venezuela, whose management
was once autonomous, Mr. Chávez's government has meddled in the company's
top ranks and mismanaged its finances by appointing what they called
"ideologues."

Instead of increasing production, Chávez appointees sold oil at cut rates
to Cuba and began funneling ever-growing sums of money into little-known
social programs, said alienated former oil executives like Mr. Fernández.
"The petroleum industry serves the government, not the Venezuelan state,"
Mr. Fernández said. "I cannot work in this company, or this country, the
way it is." When he joined the company 18 years ago, Mr. Fernández said,
workers rose through the ranks in a highly structured, merit-based process
that graded them on their achievements. "You made your career," said Mr.
Fernández, who started as a budget analyst. "It was up to you if you rose."
But now, he and others said, there is little respect for what executives
here called "the meritocracy" that had made Petróleos de Venezuela highly
unusual among many state-run companies.

The displeasure with the government's interference and Mr. Chávez's
policies has prompted about 90 percent of the company's 15,000 office
workers — people who had once pledged loyalty — to walk out. In addition to
the executives, tanker crews have declared themselves in rebellion and
workers at refineries and other installations have also walked off the job.
"This is worth more than a career," said Edgar Paredes, president of the
company's chemical branch and one of the opponents dismissed by the
government. "History has given us an opportunity, and we are going to use
that opportunity. What is in play is very important: the future of
Venezuela and its liberty."

Mr. Chávez acknowledged in an interview on Sunday that the industry had
been battered by the walkout. He called the strike an attack and sabotage
and vowed to weather the crisis by searching for replacement workers and,
if necessary, seeking technicians from the Organization of Petroleum
Exporting Countries, of which Venezuela is a member.

Not all workers at the company have left. The president has the help of
people like Enny Pulgar, 48, a 25-year veteran, who is working 15 hours a
day, seven days a week, to fill in. "I am proud to be defending a company
that has given me bread for 25 years, but also to defend the government I
voted for," she said. In his weekly radio address on Sunday, Mr. Chávez
said he would stand by his aim to use the company to ease poverty, calling
the plan a "nationalization" of the company. "Pdvsa will serve the
interests of Venezuela, not the elite," he said. He called for tough
measures, including giving Ali Rodríguez, the company's president, the
authority to hire and fire, powers once held by the board of directors.

The government has also started to retake tankers whose crews declared
themselves in opposition, and used the military to commandeer private
tanker trucks to keep gasoline flowing for the domestic market. Still,
bringing Petróleos de Venezuela back to life is a patchwork effort, say the
pro-Chávez workers who have stayed on the job. The company's headquarters
in Caracas is three-quarters empty, many blue-collar workers remain on
strike, and shipping clerks are, in some cases, declining to take orders.
Omar Pérez, a human resources analyst now working in the shipping
department, said he and others loyal to Mr. Chávez were determined to
resuscitate the company. "We are hanging by the edge of our nails," said
Mr. Pérez, 45. "But we are doing it."