International News, Green Left Weekly issue #7089 May
Venezuela takes on oil multinationals
4 May 2007
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 …”
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.
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
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 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.”
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,
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.”