Oil Factor Could Be Tipping Point in Venezuela ; as Venezuela's General Strike Enters Its Second Week, Exports Have Been Shut Down and at Least One State Has Reported Being without Gasoline

Article excerpt

To get rid of President Hugo Chavez, 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 Chavez 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 Chavez opponents. Back in April, following days of protests and the killing of 19 demonstrators by Chavez loyalists, Chavez 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 Chavez is PDVSA," says Mr. Ochoa. Chavez took to the airwaves for five hours on Sunday saying he had plans to replace PDVSA's board, which had already offered to resign. Chavez 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. …