[R-G] Venezuela: The Spectre of Big Oil

[Anthony Fenton]

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A Socialist Project e-bulletin .... No. 86 .... March 4, 2008
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Venezuela: The Spectre of Big Oil

Paul Kellogg

"Never again will they rob us – the ExxonMobil bandits. They are  
imperial, American bandits, white-collared thieves. They turn  
governments corrupt, they oust governments. They supported the  
invasion of Iraq." This was the response from Venezuelan president  
Hugo Chávez to the successful lawsuit by the world's biggest  
corporation (ExxonMobil), freezing $12 billion in assets of  
Venezuela's state-owned oil company, PDVSA – a serious escalation in  
Big Oil's long running dispute with Chávez and the movement he  
represents.

ExxonMobil isn't suing PDVSA because it needs the money. The world's  
largest publicly traded corporation recorded profits of $40.6-billion  
(U.S.) in 2007, up three per cent from 2006's record of $39.6- 
billion. "If Exxon were a country, its 2007 profit would exceed  
output of two-thirds of the world's nations. Its 2007 revenue of $404- 
billion (U.S.) would place it among the 30 largest countries, ahead  
of such middle powers as Sweden and Venezuela."

ExxonMobil claims it is suing PDVSA because of a June 2007 deadline  
given by Chávez to Exxon and other Big Oil corporations operating in  
Venezuela, demanding they cede majority control in their heavy-crude  
upgrading projects in the country. ExxonMobil and ConocoPhillips  
filed arbitration requests with the International Center for  
Settlement of Investment Disputes, and ExxonMobil simultaneously took  
legal action in courts in the U.S. and Britain, which on February 7  
agreed with their claim, and ordered the freeze of PDVSA assets.

But there is much more at stake than a simple legal disagreement.  
First – many other Big Oil companies have agreed to Chávez' terms and  
not gone to court – among them, Chevron Corp., Norway's Statoil ASA,  
Britain's BP PLC and France's Total SA. Second, Venezuela is not the  
only country to confront Big Oil and demand that old contracts be  
renegotiated. Here in Canada, Newfoundland's Danny Williams demanded  
and won an ownership share in the multi-billion-dollar Hebron  
offshore oil deal. Even the Tories in Alberta are forcing Big Oil to  
pay higher royalties. And in Russia, "both BP PLC and Royal Dutch  
Shell PLC have ceded control in big, lucrative Siberian projects to  
Russian gas monopoly OAO Gazprom."

The truth is, ExxonMobil's ultimatum has more to do with politics  
than economics. Russia's ruler Vladimir Putin holds office because of  
his ties to the secret service, his crackdown on public debate, and  
his commitment to pushing Russia back into the world of Big Power  
politics. That world of corruption and repression is comforting and  
familiar to the owners of ExxonMobil. Chávez, by contrast, holds  
office because millions have again and again been willing to put  
their bodies on the line against multinational corporations and their  
local allies. That revolutionary movement is terrifying to ExxonMobil.

So – working with courts in the U.S. and Britain (the two biggest  
western imperialist powers) – ExxonMobil is testing the water, seeing  
just how strong the revolutionary movement in Venezuela is. This is  
especially critical, given the setback faced by Chávez in the recent  
constitutional referendum.

And we shouldn't doubt the capacity of multinational corporations to  
use a legal fig leaf to pursue their "right" to pull exorbitant  
profits out of the Global South. "BP won an arbitration case against  
Libya in the 1970s ... and chased tankers of Libyan crude around the  
world to seize them as payment." In 2006 and 2007, "Western companies  
that purchased debt for unpaid construction work in the Congo have  
tried to seize tankers of Congolese oil to satisfy arbitration awards."

The ExxonMobil attacks have been met with defiance in Venezuela.PDVSA  
denies that any significant assets have been affected by the court  
action. "PDVSA is operating at 100 percent and is exporting oil all  
over the world," said Venezuelan Energy Minister Rafael Ramirez.  
February 11, Chávez said that if ExxonMobil does succeed in freezing  
PDVSA assets, he would halt oil exports to the United States. This is  
a threat the U.S. has to take seriously. As well as being the fourth  
largest exporter of oil to the U.S., if Venezuela succeeds in  
certifying an additional 200 billion barrels of oil reserves to the  
100 billion already certified, it will officially have the most  
proved reserves of oil, in the world.

With so much at stake, U.S. imperialism and its corporate allies are  
not at the moment in a position to launch a sequel to the failed coup  
of 2002. Venezuela's movement is too big, and Venezuela's oil is too  
important for that to happen – for now. But we know from the bitter  
history of Big Oil and the Global South that this is not the last  
confrontation between corporate and popular power in Venezuela.

Paul Kellogg is a member of the International Socialists and blogger  
-- www.PolEconAnalys.org -- where this article was originally published.








Stop ExxonMobil's theft from the poor!
Support Venezuela's right to sovereignty!

United States oil giant ExxonMobil Corporation has launched a major  
attack on the Venezuelan people's right to independence and self- 
determination.

In January and February, ExxonMobil used the courts in Britain, the  
U.S. and the Netherlands to get injunctions that freeze up to $12  
billion in assets of Venezuela's state-owned oil company, Petróleos  
de Venezuela (PDVSA), in those countries. The British injunction,  
granted on January 24 without any prior notice to PDVSA, will be  
heard again on February 22. The U.S. injunction was upheld by a  
February 13 ruling of the U.S. Federal Court.

ExxonMobil's economic thuggery is an attempt to undermine and reverse  
the Venezuelan government's decision last May to nationalise  
ExxonMobil's 41.7% stake in the Cerro Negro project in the Orinoco  
oilfield. The nationalisation was part of the revolutionary  
government's efforts to recover Venezuela's sovereignty over its  
natural resources. ExxonMobil rejected the Venezuelan government's  
offer of compensation, instead using the legal system in various  
First World countries to punish the country. In contrast, France's  
Total and Norway's Statoil have agreed to accept from Venezuela close  
to $1 billion compensation for part of their holdings in the oil  
project.

ExxonMobil is the world's largest oil company, and was a key  
"stakeholder" in the US's bloody invasion and occupation of Iraq. The  
corporation's attack on Venezuela is a continuation of its aggressive  
response to any government daring to assert its nation's right to own  
and control their natural resources. More fundamentally, the attack  
also aims to destabilise Venezuela and undermine the socialist  
revolution being constructed by the Venezuelan people.

PDVSA accounts for some 90% of Venezuela's foreign exchange and half  
of its federal tax revenue, and it is the crucial source of funds for  
the Venezuelan government's programs that provide free education and  
health care to the poor. In 2006, the state-owned oil company spent  
$13.3 billion on such programs, up from $6.9 billion in 2005 and more  
than double the $5.8 billion it invested in new domestic gas and oil  
projects.

ExxonMobil's actions have angered poor Venezuelans, who have held  
protests around the country. As oil workers' union leader Luis  
Carvajal said: "This transnational has exploited our wealth, has  
exploited our workers and violated our rights. All the workers in the  
Orinoco oil belt support the nationalisation."

Venezuela supplies about 10% of the US's oil. On February 14, PDVSA  
halted oil supplies to ExxonMobil and the government is now  
considering suspending oil supplies to the USA. As Venezuela's energy  
minister, Rafael Ramirez, has emphasised, the interests of the  
Venezuelan nation are more important than any corporation, and  
Venezuela will not back down from its policy of full oil sovereignty.

In light of these events, we the undersigned:

  ** Support the Venezuelan government's efforts to defend and extend  
the Venezuelan people's common ownership and control over Venezuela's  
natural resources, and defend the Bolivarian Republic of Venezuela's  
right to assert its social, political and economic sovereignty.

  ** Condemn ExxonMobil's economic blackmail against Venezuela and  
call for it to immediately withdraw its legal campaign against PDVSA.

  ** Reject as illegitimate and immoral the British, U.S. and Dutch  
courts' order to freeze PDVSA's assets. Only Venezuela, through its  
own courts and in accordance with its own Constitution, has the right  
to decide the ownership and control of the resources in its  
territory. So-called "international arbitration" on Venezuela's  
resources via courts in the First World countries is colonialism.

  ** Stand in solidarity with the protest actions of Venezuela's  
people, trade unions and social organisations against ExxonMobil and  
the U.S. government's economic and political thuggery, and commend  
the words of Venezuelan President Hugo Chavez: "They will never rob  
us again, those bandits of ExxonMobil."


Show your support by Signing on - http://venezuelasolidarity.org/? 
q=node/2397


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