Venezuela
Takes On Oil Multinationals
By Stuart Munckton
12 May, 2007
Green Left
Weekly
“Thousands
of Venezuelan workers took control of foreign-owned oil fields yesterday
as Hugo Chavez stepped up his battle with Washington in a new wave of
nationalisation and an announcement that the country was leaving the
World Bank and the International Monetary Fund [IMF]”, reported
the British Guardian on May 2.
The paper reported on the
most significant of the new moves by the pro-working-class government
of President Hugo Chavez to “deepen” the pro-poor revolution
it is leading in order to create “socialism of the 21st century”
— the forcing of the foreign oil giants operating in the Orinoco
Belt, believed to hold the world’s largest reserves of crude oil,
into joint ventures with PDVSA that will give the state-owned oil company
at least 60% control. The investments of ConocoPhillips, Chevron, Exxon
Mobil, BP, Statoil and Total in the area amount to US$17 billion.
Chavez gave oil corporations
until May 1 to cede control. All but ConocoPhilips struck agreements
handing a majority of shares over to PDVSA. The Guardian reported that
oil workers began gathering at key installations on the evening of April
30. The paper reported: “Amid jubilant scenes, oil workers wearing
red T-shirts emblazoned with ‘yes to nationalisation’ moved
into the giant Orinoco basin shortly after midnight …”
The moves follow the bitter,
and ultimately successful, battle to bring PDVSA under full government
control in 2003. Previously, the nominally state-owned industry was
run by a corrupt elite that, before Chavez’s election in 1998,
had begun preparing for the industry’s privatisation. Only 20%
of PDVSA’s revenues were being handed over to the state.
Despite being the largest
oil producer in Latin America, when Chavez was elected the majority
of Venezuela’s population lived in poverty. The PDVSA elite allowed
private oil corporations access to Venezuela’s oil reserves in
the 1990s under a policy known as the “opening”.
As well as imposing a series
of tax and royalty hikes on oil corporations operating in the country,
last year the government forced 32 private operations into joint ventures
with PDVSA that gave the company a majority share. Corporations that
failed to come to an agreement were forcibly taken over.
The government has used the
growth in oil revenue, a result of high prices and increased government
control of the industry, to fund its social missions, which are aimed
at redistributing wealth and empowering the poor. Pro-poor policies,
which are at the heart of the Bolivarian revolution led by Chavez, have
resulted in a reduction in the official level of households living in
poverty from just under 50% at the time of Chavez’s election to
37% by 2005.
Following his re-election
in December, with the largest number of votes in Venezuelan history
and on an explicit platform of constructing socialism, Chavez insisted
that strategic industries need to be under government control, and that
“all that was privatised, let it be nationalised”. Venezuela’s
largest telecommunications company and six electricity companies have
since been nationalised.
While angering the US government
and Venezuela’s corporate-owned media, such policies are strongly
supported by working people. Reuters reported that at midnight on May
1, workers who had gathered for a symbolic event welcoming the takeover
“exploded into a frenzied celebration after a New Year’s
Eve-style countdown, dancing until the early dawn hours with some standing
atop a pipeline that runs toward the installations”. Venezuelanalysis.com
reported on May 2 that PDVSA oil workers at the event symbolically swapped
their traditional blue helmets for new red ones — the colour of
the Bolivarian revolution.
Speaking to oil workers on
April 30, energy minister Rafael Ramirez said: “Welcome to the
new PDVSA. Here we begin the real petroleum nationalisation.”
He explained, “The existing oil reserves in all national territory
… belong to the republic and are goods of the public domain. Venezuela
is exercising its right to administer its natural resources for the
benefit of the people.”
Venezuelanalysis.com reported
that Chavez addressed a gathering of 40,000 oil workers and supporters
at the Industrial Complex Jose Antonio Anzoategui, on May 1 to celebrate
the takeover and May Day, the international workers’ day. Standing
in front of a banner reading “Full oil sovereignty. Road to socialism”,
Chavez said: “Finally, today we have buried the 10 years of petroleum
opening [to private corporations … Imperialism dominated our basic
industry, our energy resources and our natural resources for a long
time. That is over today.”
This year’s May Day
further signalled the degree to which the Chavez government is attempting
to deepen the revolutionary process in favour of the poor and working
people. Venezuelanalysis.com reported on May 1 that the previous evening
Chavez announced an increase in the minimum wage of 20%, bringing it
to $286 per month, the highest in Latin America. The minimum wage has
been repeatedly increased under Chavez; it was $183 per month when he
was first elected.
Chavez explained that previously,
conditions imposed on Venezuela by the IMF required low wages. Responding
to criticism from the right-wing, opposition-controlled Confederation
of Venezuelan Workers that the increase was insufficient, Chavez pointed
out that public service workers also receive food stamps worth $209,
making the real minimum wage for public sector workers $495 per month.
A May 2 Bloomsberg.com article
reported that the government also used May Day to announce plans to
slash the working week from 44 hours to 36 hours by May 1, 2010. A commission
has been established to draw up a new labour law, with shortening of
the working week a key component. According to labour minister Jose
Ramon Rivero, the law would also protect household labour, require bosses
at firms with more than 20 workers to provide meals, and promote the
organisation of socialist education classes in workplaces.
Venezuelanalysis.com also
reported that Venezuela was officially withdrawing from the IMF and
World Bank. The Chavez government has been an outspoken critic of the
institutions, which force neoliberal policies on Third World countries
that further impoverish the population. Venezuela has initiated, with
the support of Argentina, Bolivia, Ecuador and Brazil, Bancosur —
the Bank of the South. Bancosur aims to provide an alternative source
of cheap credit for Third World countries without imposing harsh conditions.
Chavez announced that Venezuela
finished paying off its debt to the World Bank and IMF on April 13,
and is demanding the IMF pay Venezuela the $3.9 billion it has invested
in the institution. Chavez said: “We do not need to go to Washington,
to the [IMF] nor to the World Bank. We will withdraw. I want to sign
the order this evening and ask that they return what is owed us.”
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