Oil factor could be tipping point in Venezuela

To get rid of President Hugo Chávez, Venezuela's opposition tried using the military. That didn't work. Now they are enlisting the country's other major force: the oil industry.

A week-old strike has virtually shut down Venezuela's state-run oil company, PDVSA, reducing production by 40 percent, according to industry sources. Exports have halted, and gas shortages are being felt throughout the country.

For a country that relies on oil for three-quarters of its gross domestic product, observers say that a protracted battle involving the country's oil supply could be the difference in whether Chávez stays or goes. "I see this practically as trench warfare," says economist Orlando Ochoa. "It's a question of who is worn down first."

The strike, which began last Monday, is the third general strike since the beginning of the year. Strikes and marches have been used with mixed success by Chávez opponents. Back in April, following days of protests and the killing of 19 demonstrators by Chávez loyalists, Chávez was briefly ousted by a military coup, but returned to power less than 48 hours later. Some strikes have lasted a day or two, but with little effect.

But as the current work stoppage moves into its second week, the difference this time may be the oil factor.

"The flagship of the fight against Chávez is PDVSA," says Mr. Ochoa. Chávez took to the airwaves for five hours on Sunday saying he had plans to replace PDVSA's board, which had already offered to resign. Chávez also said that Venezuelan law allowed him to use the Army to guarantee the running of oil-related public services, such as refineries, gasoline stations, and distribution.

"This is what we have started to do, and we are going to increase it," he said. Yesterday, the national guard commandeered delivery trucks to ensure that gas stations would remain open.

But opposition leaders denounced what they called the creeping "militarization" of oil sites.

"You can't resolve this crisis through the simple military occupation of oil installations," opposition spokesman Cesar Perez told reporters. Analysts say that military personnel do not have either the experience or qualifications to manage huge oil tankers or to operate complex automated refineries or loading terminals.

The ongoing strike is being felt by other industries as well. "When you cut oil production," says Jorge Kamkoff, a member of the board of the state petroleum corporation PDVSA, "you have to cut gas. And when you cut gas, that brings supply problems."

The electricity industry is highly dependent on gas, as are heavy industries like steel and aluminum, which opposition sources say are practically shut down. "I don't even want to imagine what would happen if entire cities were left without electricity," Mr. Kamkoff says.

Striking managers insisted electricity production would remain unaffected. The strike was beginning to force the closure of filling stations, however, and at least one state - Carabobo - was reported to be completely without gasoline.

The international community has also begun to express serious concern. On Saturday, Secretary of State Colin Powell spoke by telephone to Cesar Gaviria, who is chairing talks by the Organization of American States (OAS). Peru issued a statement saying it was consulting with others in the region as to possible moves.

A senior diplomatic source told the Monitor that statements of support from governments from Canada to Chile for the OAS's efforts had been orchestrated behind the scenes by the United States, which relies on Venezuela for some 13 percent of its oil-related imports.

Last Friday, echoes of the April demonstrations were felt when three people were killed and 28 were injured during a rally. The shots were fired moments after opposition leaders said they would continue the strike into this week. Six men have been arrested in the incident.

The shootings came amid negotiations mediated by the OAS. Opponents had been calling for a nonbinding referendum on Chávez's presidency. Now, following the Friday killings, the opposition has upped its demands, calling for Chávez's resignation and new elections. Negotiations continued yesterday.

Chávez has faced criticism since taking office in 1998. Chávez's antielite rhetoric won points with Venezuela's poor. But soon, he began rewriting the country's Constitution, and opponents accused him of trying to consolidate power in his own hands and create a Cuba-like socialist state. Polls now show him with only 30 percent approval ratings.

As soldiers mounted roadblocks in parts of Caracas, the Army commander insisted the military were "of one mind" in backing the government.

But a senior admiral who recently broke with Chávez called on generals and admirals to ask the president to resign. "If they don't," said Rear Adm. Alvaro Martin Fossa, "their subordinates will go over their heads."

• Material from the wires was used in this report.