Venezuelan president Hugo Chávez announced on Feb. 12 that crude oil shipments to ExxonMobil are canceled, in a growing confrontation with the world’s largest corporation over Venezuela’s ongoing nationalization campaign.
Venezuela’s move is an immediate response to a London court injunction freezing $12 billion of Venezuela’s oil assets
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ExxonMobil, whose 2007 profits of $40.6 billion are the largest in history, has secured similar rulings in the Netherlands and in the United States. Venezuela’s minister of energy and petroleum, Rafael Rodríguez, stated that Venezuela will fight the injunctions vigorously. Venezuela has already presented its legal response in the Netherlands and Britain.
The ongoing dispute arose out of Chávez’s 2007 announcement that foreign petroleum firms operating in the Orinoco Belt would have to surrender their majority-stakes ownership to Venezuela’s state-owned company Petróleos de Venezuela S.A. (PdVSA). The Orinoco holds enormous untapped oil and gas reserves—perhaps 200 billion barrels of heavy oil and at least 5 trillion cubic feet of natural gas.
Although other foreign oil companies balked at first, several of them—StatoilHydro of Norway, Total of France, BP of Britain and Chevron—have signed agreements giving Venezuela at least 60 percent ownership. ConocoPhillips is currently negotiating with PdVSA and will likely sign a new investment agreement.
China and Venezuela have entered into key petroleum agreements, with Venezuela purchasing 18 oil tankers and dozens of drilling rigs from China. China, in turn, has been granted licenses to drill in light-oil regions, as well as in the Orinoco.
Rather than accept a joint venture, ExxonMobil has decided to try to impose the weight of imperialist courts against Venezuela for daring to claim its own natural resources.
Although ExxonMobil’s investments in the Orinoco amount to about $2 billion, it is seeking to seize $12 billion. Its court action is an attempt to preempt an impending arbitration to resolve the dispute, to which Venezuela had agreed.
Chávez addressed the matter on his weekly television show “Aló Presidente” on Feb. 12, two days before the suspension of crude shipments to ExxonMobil. He reiterated Venezuela’s right to control its resources and warned that all oil exports to the United States may be stopped in the future as a result of ExxonMobil’s attack.
“If you end up freezing and it harms us, we’re going to harm you,” Chávez said. “Do you know how? We aren’t going to send oil to the United States. Take note, Mr. Bush, Mr. Danger.”
Chávez also pointed the finger at Washington for increasing aggression against Venezuela. The United States is the biggest importer of Venezuelan oil, between 1.2 million and 1.5 million barrels a day.
Since Chávez’s election in 1998, Venezuela has regained control over much of its energy wealth by assuming majority control and raising royalties on the foreign extractions. The oil companies had historically paid a pittance in royalties, siphoning off vast amounts of wealth while almost 80 percent of the population was left impoverished.
The 1999 Bolivarian Constitution affirmed that the land and natural resources belong to Venezuela. Since then, the oil companies have had to pay billions more in royalties. That regained wealth has been converted into schools, free health care for all, housing, food programs and more.
The showdown with ExxonMobil was inevitable, with its determination to bleed Venezuela after amassing unprecedented profits worldwide. The Venezuelan people have fought to defend their sovereignty time and again for almost 10 years. They are not about to give in to the threats from ExxonMobil or U.S. imperialism.
