Venezuela's Oil Situation Worsens as Strike Continues

Published December 17, 2002

| FoxNews.com

As the political crisis in Venezuela worsened Tuesday, thousands marched to demand President Hugo Chavez's ouster as Venezuela's opposition continued its 16th day of striking. The results of the conflict include the choking of gas supplies and oil income in the world's fifth largest oil exporter.

"The overall sentiment among workers is: Strike until he leaves," said Gonzalo Feijoo, a planning adviser for Venezuela's state-owned oil monopoly, Petroleos de Venezuela, S.A., where top management is in open rebellion.

The threat to domestic transportation and the loss of $50 million daily in export income posed the strike's biggest dangers for Chavez, who has sent soldiers to striking oil facilities to little effect.

Thousands of protesters demanding Chavez resign marched along a highway toward the tomb of independence hero Simon Bolivar on the 172nd anniversary of his death.

They were turned away at the last moment by march leaders to avoid clashes with jeering Chavez supporters. Under police escort, about 30 march leaders laid flowers on Bolivar's tomb.

"We are going to keep fighting until our country is free again," said retired Marine Lt. Cmdr. Jose Angel Cano as he laid a red rose on the bronze tomb.

Two dozen national guardsmen and 200 police struggled to control the surging opposition crowd as it approached the tomb. The site is near the presidential palace, where bloody protests eight months ago led to Chavez's brief ouster.

Opposition demonstrations took place elsewhere in Venezuela. More were promised for Wednesday.

Chavez maintains Venezuela's constitution requires him to accept the results of a possible recall halfway into his six-year term, or next August. He has defied calls for earlier elections.

The strike has reduced Venezuela's oil output of nearly 3 million barrels a day to less than 400,000 barrels per day, state oil officials said Tuesday, sending crude prices above $30 a barrel. Venezuela's strike coincides with speculation that possible U.S. action against Iraq might take Iraqi oil off the market.

One of the world's largest oil refineries halted production because of the strike. Curacao's Refineria Isla was running out of storage capacity as international clients sought alternate supplies, said Norbert Chaclin, the refinery's technical manager.

The refinery, operated by Venezuela's oil company, stopped producing gasoline, lubricants, jet fuel, propane and other products for the United States and the Caribbean, Chaclin said. Its last delivery was Sunday.

Two of Venezuela's largest refineries, including one producing gasoline for Venezuela and the United States, have shut down. State oil executives have vowed to cap wells until Chavez resigns or calls early elections.

Venezuela's 13-tanker shipping fleet lies at anchor, its striking crews refusing to deliver their cargos. Foreign shippers refuse to operate in Venezuela, citing unsafe conditions. Insurers refuse to cover transport to and from Venezuela, the No. 4 oil exporter to the United States, supplying 10 percent of U.S. oil imports.

Chavez was dealt another blow Tuesday when officials at the giant Hovensa refinery in the U.S. Virgin Island of St. Croix announced no gasoline shipment was headed to Venezuela.

Venezuela has a majority stake in the refinery, which also supplies the U.S. East Coast and is one of the largest in the Western Hemisphere. Its 400,000-barrel-per-day production has been cut in half.

Chavez insisted Sunday his government would ensure gasoline deliveries. He commandeered private trucks to deliver it. That hasn't stopped panic buying and mile-long lines as state oil executives insist gas will run out within days. Transport problems have led to shortages of basic staples, and Colombia said Tuesday that Venezuela has asked it for food.

"If the gasoline goes, there will be chaos," Rafael Haddat, a 44-year-old agronomist, said at a filling station.

In the eastern state of Anzoategui, police stopped about 300 pro-Chavez workers heading to the Anaco natural gas plant to force it to open. Energy Minister Rafael Ramirez said officials convinced workers to increase production at the plant, vital to steel and aluminum industries.

Signs of desperation appeared. Officials have tried to install unqualified and long-retired seamen to move the Pilin Leon, a tanker carrying 280,000 barrels of gasoline that has been anchored in protest in Lake Maracaibo, said Fernando Reyes, a spokesman for the striking merchant mariners union.

Last week, state oil president Ali Rodriguez — a former secretary general of the Organization of Petroleum Exporting Countries — urged Chavez street activists to rally around oil facilities throughout the country.

Chavez has fired top executives at the state oil monopoly, which prizes its autonomy and accuses the Venezuelan leader of politicizing the company. Among their complaints are oil exports to communist Cuba.

Opposition strikers also are considering a march on the presidential palace itself. The last time they tried, 19 people were killed and hundreds were wounded — some at the hands of pro-Chavez civilians. The April 11 bloodshed provoked a coup that ousted Chavez for two days. He was restored when a new government dissolved the constitution.

"These talks provide an opportunity which must not be missed," said U.N. Secretary-General Kofi Annan.

The United States expressed strong support Tuesday for an Organization of American States resolution, which rejects any attempt at subverting the democratic process in Venezuela. OAS Secretary General Cesar Gaviria is in Caracas mediating negotiations on possible elections.

The Associated Press contributed to this report.

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