Bush and ExxonMobil v. Chavez - by Stephen Lendman
Since the Bush administration took office in January 2001, it's targeted Hugo Chavez relentlessly. From the aborted two-day April 2002 coup attempt to the 2002-03 oil management lockout to the failed 2004 recall referendum to stoking opposition rallies against the constitutional reform referendum to constant pillorying in the media to funding opposition candidates in elections to the present when headlines like the Reuters February 7 one announced: "Courts freeze $12 billion Venezuela assets in Exxon row." Call it the latest salvo in Bush v. Chavez with ExxonMobil (EM) its lead aggressor and the long arm of the CIA and Pentagon always in the wings.
EM temporarily won a series of court orders in Britain, New York, the Netherlands and Netherlands Antilles to freeze up to $12 billion of state-owned PDVSA assets around the world. Hugo Chavez called it Bush administration "economic war" against his government. Energy Minister and PDVSA president, Rafael Ramirez, said it was "judicial terrorism" and that "PDVSA has paralyzed oil sales to Exxon (and) suspend(ed) commercial relations" in response to actions it "consider(s) an outrage....intimidating and hostile."
PDVSA's web site went further. It explained that the company will "fully honor existing contractual commitments relating to investments in common with ExxonMobil on the outside, reserving the right to terminate those contracts" under terms that permit. This likely refers to a Chalmette, Louisiana joint venture between the two companies that refines 185,000 barrels of oil daily into gasoline. It also reflects a commitment to supply 90,000 barrels of oil daily to Exxon that continues unaltered.
EM sought the injunctions ahead of an expected International Centre for Settlement of Investment Disputes (ICSID) arbitration ruling. It's over a compensation claim owed Exxon after Venezuela nationalized its last privately-owned oil fields last May in the Orinoco River region. PDVSA now has a majority interest, Big Oil investors have minority stakes, but the government offered fair compensation for the buyouts. Chevron, UK's BP PLC, France's Total SA and Norway's Statoil ASA agreed to terms and will continue operating in the country.
ExxonMobil and ConocoPhillips balked, and it led to the current action. In Exxon's case, it refused a generous settlement offer for its 41.7% stake, but that's the typical way this bully operates. The company is the world's largest, had 2007 sales topping $404 billion, it's more than double Venezuela's GDP, and it places EM 25th among world nations based on World Bank GDP figures.
It's too early to predict what's ahead, but one thing is sure. As long as George Bush is president, he'll go after Chavez every way possible with one aim in mind - to destabilize the country and remove the Venezuelan leader from office. Once again, battle lines are drawn as the latest confrontation plays out judicially, economically and geopolitically. The stakes are huge - the most successful democracy in the Americas and the "threat" of its good example v. the world's most powerful nation and biggest bully.
The next judicial hearing is on February 22, but it's unclear where things now stand with Exxon and the Chavez government having different views. The oil giant claims PDVSA's assets are frozen, but on February 9 Minister Ramirez denied it saying: "They don't have any asset frozen. They only have frozen $300 million" in cash through a New York court. On February 13, it heard the case, and to no one's surprise affirmed the freeze until a final arbitration settlement is reached. PDVSA has no "assets in that jurisdiction (or in Britain) that even come close to those" billions that are about 16 times the value of Exxon's Venezuelan $750 million investment.
Ramirez also added that EM's action is a "transitory measure" while PDVSA pressed its case in New York and will do it again in London. The current status has no "affect on our cash flow (or) operational situation at all." Exxon wants to undermine the government and "create a situation of anxiety in the country, a situation of nervousness."
Ramirez expressed confidence that his government will prevail. It's arbitrating fairly, offered just compensation, and that in the end may defeat the latest Bush administration assault against the right of a sovereign state to its own resources. He also explained that Exxon violated ICSID arbitration proceedings by seeking separate court orders, and that PDVSA is considering a response. It may sue the oil giant for damages that caused Venezuela's dollar-denominated bonds to record their biggest drop in six months on the prospect of a long legal battle.
On February 8, PDVSA declared its position on its web site to put the facts in context, clarify the situation, and dispel how the dominant media portrays it ExxonMobil's way. Below is a summary.
The company states it's been "in arduous level agreements and negotiations with" its joint venture partners - "Total, Statoil, (Italy's) ENI, ConocoPhillips, Petrocanada, (China's) CNPC, Petrochina, (Venezuela's) Ineparia, British Petroleum (and) Exxon Mobil." The US giant is the "only case in which we have a clear situation of conflict" so it was "envisioned that these strategic issues....could be settled in international (arbitration) tribunals." It appears that agreement has been reached or "in the process of agreeing" with every company (including ConocoPhillips) except ExxonMobil, and the situation with them is this: "this company has not complied with the terms of arbitration....and introduced an arbitration against the Republic (in) the International Centre for Settlement of Investment Disputes (ICSID)."
PDVSA awaits its ruling "which, we are confident, will promote the interests of the Republic." In addition, Exxon sued PDVSA. As a result, "we see a clear position (of this company) to go against the sovereign interest of an oil-producing country such as Venezuela," deny its legal right to its own resources, and get overt US backing for it from State Department spokesperson Sean McCormack saying: "We fully support the efforts of ExxonMobil to get a just and fair compensation package for their assets according to the standards of international law" that Washington defiantly trashes.
PDVSA's statement explained that the national media have "such ignorance of the situation (by reporting that) our company has (assets of) 12 billion dollars (frozen and) that is completely untrue....we do not have any court decision that is final with respect to all of our assets. We have an interim measure in a court in New York, we have the right - and so we are going to....respond. This is a transitional measure while (PDVSA) presents its case; defend(s) ourselves....defend(s) the interests of the Republic and we are confident we will remove this measure."
Exxon also got injunctions in London and the Netherlands. "I must report we have no assets in those jurisdictions...."The same status is true for the Netherlands Antilles" where another injunction was gotten.
"We are no longer surprised (about) the attitude of ExxonMobil, as it is the typical American transnational company which....historically has tried to attack the oil-producing countries and impose their views on the management of (their) national resources....On behalf of workers and our oil industry, we are not going to (be) frightened, intimidated, or retreat in the sovereign aspirations of our people to manage their natural resources."
I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.
As one retired, progressive, US geezer to another, I tip my hat to you, Stephen. You've done a superb job of righting the balance in US coverage of Venezuelan affairs. Most of our compatriots, even those who consider themselves well-informed, know NOTHING, thanks to the corporate media, about what is really going on around them. Which suits the corporations just fine. Well done! Power to your pen! Scott Griffith.
by
Scott Griffith (0 articles, 0 quicklinks, 0 diaries, 18 comments)
on Monday, February 18, 2008 at 2:50:01 PM
Let's start with what I'm sure we agree on, Bush & the neocons are bad, & the US gov should stay out of venezuela's affairs. The things you cite, such as NED & covert involvement, are wrong & should end immedeately.
Where I disagree with you is on your positive asesment of Chavez. To give you some background I lived in venezuela form '93 to the begining of '00, in other words, through the forst year of Chavez administration. It was terrible. The economy contracted 19% during the first six months of '99 & hasn't recovered to '98's level of GDP even after 10 years of the red paratrooper's reign.
Corruption is still rampant in the gov there despite the fact that ending it was one of the major issues Chavez ran on in '98.
Crime is out of control in Venezuela. Murder rates have increased greatly & kidnappings are way up.
You mentioned the shorages of food, enough said about that.
Chavez has made himself a dictator ruling by decree with a rubberstamp congress giving him such power. Simón Bolívar had this to say about such a concentration of power in the executive:
"Huid del país donde uno solo ejerce todos los poderes: es un país de esclavos."
When you ad it all up, it's just another example of how socialism doesn't work, the "Bolivarian" revolution has failed.
by
Darren Wolfe (2 articles, 63 quicklinks, 39 diaries, 367 comments)
on Monday, February 18, 2008 at 6:34:16 PM
