The Venezuelan government's seizure of 70 oil service companies last month has set the stage for a clash between President Hugo Chávez and unions and local government.
BY TYLER BRIDGES
McClatchy News Service
CIUDAD OJEDA, Venezuela -- Despite the recent sharp rise in oil prices, Venezuelan President Hugo Chávez last month seized 70 oil service companies in western Venezuela, putting 10,000 out of work, turning unions against him and forcing production cuts at important oilfields.
Protesting workers have blocked oil company offices, stopped vehicular traffic at one oil port and marched through the streets shouting angry denunciations of the government.
More tension awaits.
Chávez has stopped short of nationalizing big U.S.-based multinationals such as Halliburton or Schlumberger. Nor have the owners of the 70 Venezuelan firms -- in addition to four foreign-owned firms -- protested publicly, fearing that doing so might jeopardize settlement negotiations with the government.
Analysts said Chávez seized the private companies, which provide support services such as cleaning and transport across giant Lake Maracaibo, where the oil is located, to save money for PDVSA, the state oil company. It owes $5 billion to its creditors. There's a political narrative to the action as well, however.
The companies the government seized are concentrated in Zulia state, which consistently has opposed Chávez during his 10 years in power. Now the stage is being set for a confrontation between Chávez and the local power structure, including unions, management and local government, with PDVSA's oil production activities caught in the middle. Oil production, which has fallen 25 percent during Chávez's time in office, could slide still further and weaken the national economy.
Political unrest could be around the corner. The state oil company has promised to hire 8,000 of the workers laid off from the private companies. But PDVSA is moving slowly, apparently in part because, according to workers, it's conducting background checks to ensure that they don't have a demonstrated record of opposing Chávez.
The governor, Pablo Pérez, charged that Chávez's expropriations have led to a ''job massacre.'' Pérez is under pressure from Chávez, with government prosecutors investigating corruption charges against him that he called groundless. It has been only two months since Manuel Rosales, Zulia's most prominent politician and Pérez's predecessor, fled into exile to avoid similar charges.
Meanwhile, Chávez supporters are accusing Diario La Verdad, the Zulia newspaper that doesn't follow the government's line, of engaging in ``media terrorism.''
However, it's the prospect of losing their jobs that worries tens of thousands of workers in the oil-dependent towns along the eastern shore of Lake Maracaibo.
''It could blow up in a month, a month and a half,'' said German Cortez, who heads a union. ``If people are hungry, they'll hit the streets.''
Chávez promised a better day when he came to Ciudad Ojeda on May 8 to celebrate the expropriation.
''To God what is God's, and to Caesar what is Caesar's,'' a Bible-quoting Chávez told supporters. ``Today we also say: to the people what is the people's.''
He cast his decision to seize the companies as the next step for Venezuela under his ''21st century socialism.'' But it has turned out to be a rerun of 20th century socialism, with the same inefficiencies that eventually weakened the Soviet empire during the Cold War.
During Chávez's decade as president, PDVSA's work force has ballooned, with the company now performing such non-oil related activities as providing subsidized food to the poor.
Standard & Poor's Rating Services announced Friday that it lowered its credit rating on PDVSA in part because of uncertainty over whether the company will pay its creditors.
The expropriation was consistent with Chávez's philosophy to seize important sectors of the economy to try to direct more of the country's wealth to the poor, said José Luis Acosta, a Zulia state lawmaker for Chávez's political party.
''The private companies didn't have the interests of the state at heart,'' Acosta said. ``They exploited the workers and used the income to finance the activities of the opposition.''
Not many analysts share that view.
''PDVSA has cash problems, and Chávez thinks the state can do the work better than the private sector,'' said Roger Tissot, an energy consultant who closely follows Venezuela for Brazil Energia Latin America. ``I think that's a mistake. The quality of service is going to decline, and production is going to suffer.''
