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From the February 2003 issue of World Press Review (VOL. 50, No. 2)

The Thirst for Oil

The Second Oil War

Mikhail Zygar, Kommersant (business-oriented), Moscow, Russia, Dec. 10, 2002

The Pilin Leon, emblem of Venezuela's oil strike.
"Venezuela's Potemkin" The Pilin Leon has become the emblem of the Venezuelan opposition (Photo: AFP).
Venezuela entered the second week of a general strike yesterday. In the past week, hopes were dashed that the political crisis of the past year could be resolved without bloodshed. Three people have already died in anti-presidential demonstrations. The country’s oil industry has practically come to a standstill. President Hugo Chávez has suggested that he might use force to put down the strike, while the opposition has said it is prepared for a coup.

The main demand of the opposition, which began its fourth general strike in a year on Dec. 2, is a referendum on Chávez’s presidency. Union leaders have gathered 2 million signatures supporting a referendum, and the electoral commission has accepted them and designated a national vote for Feb. 2, 2003. The opposition’s demands were fulfilled, and it began to seem that the general strike would be but a routine episode in ongoing antagonism between the socialist president and big business. Events, however, began to follow a dramatic course.

Last week, the scale of the demonstrations was not very great, but with every day, more enterprises joined the protest action. According to union reports, at the end of the week, nearly 80 percent of workers were striking, though Vice President José Vicente Rangel said that absenteeism was only 30 percent.

For the whole week Venezuela was on the brink of violence. On Thursday, presidential supporters stormed the editorial offices of an opposition paper. On the fifth day of the strike, tragedy occurred. An unknown person opened fire on demonstrators on the Plaza Francia in the fashionable Altamira district of Caracas. Three people died: a 17-year-old girl, a 77-year-old woman, and a 44-year-old man. Twenty-eight people were wounded. The authorities promised they would find the guilty parties. Seven people were soon arrested. But the opposition blamed the government for everything. Changing their demands, they began seeking not a referendum but the president’s immediate resignation. “Hugo Chávez started a war against his own people,” declared an opposition leader. And the ringleader of the opposition’s general staff, Enrique Medina, even called for an uprising.

Even the president’s wife came out against the head of state. Maria Isabel de Chávez called on her husband, “in the name of her daughter, her family, and the country, to obey the people.” In her words, “The country cannot come to ruin solely because of one person and cannot be saved by one person.”

The conflict between the business elite of Venezuela and the country’s current president has been going on for six years. In 1996 Hugo Chávez, a retired colonel in the infantry, famed for his unsuccessful mutiny against Carlos Andrés Pérez, announced his candidacy for president. He promised to defend the poorest classes and bring order to the country. The elite accused him of authoritarian ways, but this did not prevent him from a triumphal victory in the elections, from changing the constitution, and from being re-elected to another term.

A year ago, the conflict came out in the open. Large industrialists, enlisting the support of unions, announced the first general strike. It came to nothing, because it did not deal with the leading branches of the country’s industry (namely, oil). Then dissatisfaction began to brew in the army: More and more soldiers began to demand the president’s resignation. Another chance presented itself in April—Chávez himself provided it. He decided to take the state oil company, Petróleos de Venezuela (PDVSA), under his own complete control, and he fired the board of directors, replacing them with his own colleagues (former soldiers). Soon the second strike began, supported by the oil giant.

Venezuela is the fifth-largest exporter of oil in the world and the second largest supplier to the United States. It is a country that is entirely dependent on petrodollars. The shutdown of the PDVSA monopoly was a stunning blow to Chávez. There were disturbances in Caracas, the government closed several opposition television stations, there were casualties, and a military junta replaced the head of state. But the putsch lasted all of 48 hours. Impoverished presidential supporters launched demonstrations, on the wave of which the president triumphantly returned. True, his triumph was short-lived. Fearful of appearing to the whole world like a dictator or the opposition’s oppressor, Chávez didn’t exact revenge. The opposition media continued to operate, and the courts even vindicated the rebel generals.

In October, the opposition conducted yet another strike. It proved to be but another repetition of previous disorders, however, since the oil sector continued to operate. On Dec. 2, 2002, there was a fourth attempt. The decisive moment occurred on Wednesday [Dec. 4]. At that point, oil workers joined the strike.

The symbol of the current events in Venezuela will no doubt become the tanker known as the Pilin Leon, the analogue of the Russian battleship Potemkin and cruiser Aurora. It was the Pilin Leon’s leadership that started the current oil crisis. Last Wednesday, the ship’s captain, having decided not to leave port, joined the strike.

Chávez understood how the oil rebellion could end, and he quickly ordered the military to take control of all petroleum facilities in the country. Soldiers boarded the Pilin Leon, attempting to take control of the tanker. The effort collapsed, however: The sailors refused to obey anyone but their own captain. Soon the rest of the tankers followed the Pilin Leon’s example, and the shipment of oil throughout the country was paralyzed.

The situation worsened when workers in the following oil ports struck: Puerto La Cruz, Amuay-Cardon, and Maracaibo. Chávez pounced on captains of the striking ships, calling them pirates and the opposition leaders fascists. “The time for a battle over oil has arrived,” the president declared.

In trying to take control of the situation, Chávez decided to carry out a reorganization of the board of directors of PDVSA by appointing his close ally Alfredo Riera. In protest, the remaining seven members of the board resigned.

The oil monopoly stood its own. Several oil refineries ceased operations. Ali Rodríguez, PDVSA president and a  Chávez loyalist, asserted that Venezuela was using up oil reserves intended for export and would soon cease deliveries. “We are losing millions of dollars and our reputation,” said the former head of the Organization of the Petroleum Exporting Countries.

A peaceful settlement to the conflict is no longer possible. Events are now an exact repeat of the April scenario: oil workers on strike, casualties, presidential promises to close opposition media. The creeping coup is taking on the character of a revolution. The strike’s continuation will mean Venezuela’s economic collapse and a hike in world oil prices. In the past week, prices rose almost a dollar, but if the strike continues, there will be a very serious spike.

It is unclear which of the two conflicting sides will emerge on top, but there is another, obvious victor. In order to get out of the current crisis, Venezuela will have to greatly increase oil exports. And that’s exactly what the main buyer of Venezuela’s oil needs during the opening of a war on Iraq.

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