Hugo Chavez to Oil Workers: Socialism or "Death"

South America's latter-day reactionary, the Guevara-wannabe Hugo Chavez, has offered this ultimatum to Venezuela's oil workers: take up the brotherhood of socialism, or become leeches in the streets (link).

Employees of oil companies in Venezuela have protested against an ultimatum by President Hugo Chávez's government to embrace the socialist revolution or face the sack.

Hundreds of workers picketed a refinery yesterday and said they would mobilise next week to challenge the politicisation of the state oil company, PDVSA.

The unrest followed a government warning this week that employees would be suspected of subversion unless they joined pro-Chávez trade unions and community groups.

[...]

The minister said the nationalised oil industry, which drives Venezuela's economy, must advance the president's radical agenda. "The oligarchy has to fear us, because we hate the oligarchy.

PDVSA will be here at the forefront of the revolution under the leadership of Commander Chávez." Oligarchy is government shorthand for opponents.

The minister, who doubles up as head of the oil company and is a close ally of the president, added that he would not negotiate a collective labour
contract "with any enemy of Chávez".

Union leaders condemned the comments as an attack on workers' political rights and said they would march in protest.

[...]

The oil industry has been at the heart of Venezuela's transformation under Chávez since he defeated a strike by PDVSA workers in 2002-03. Thousands of employees were sacked and replaced with government supporters, who swelled the payroll to 80,000.

To bypass inefficient ministries, Chávez entrusted the company with an operating income of $126bn (£77bn), with multiple tasks such as adult education, food distribution and bicycle manufacturing.

But production has slumped by a quarter and after prices tumbled from last year's peak and the company, once an Opec powerhouse, has struggled to pay creditors and employees who were absorbed by PDVSA after recent state takeovers of private oil contractors.

It's worth noting that Venezuela's oil production is expected to drop another 9% this year. Since Hugo Chavez taking office, the South America country's oil production has gone from 3.2 mbpd (during the late nineties, when oil was dirt cheap), to 2.4 mbpd in 2008.

- Brewskie

Hugo Chavez to Decadent Oil: "No Podemos Ser Amigos?"

This revolutionary loves socialism, but like any good socialist, he loves power more. In light of low oil prices - which recently have stayed as depressed as Kurt Cobain - Hugo, in his earnest efforts to re-inflate his paradise, is now turning to the very oil companies he kicked out when he pursued ever-increasing (but well intentioned) greed (link).

According to the New York Times:

But the shift also shows how the global financial crisis is hampering Mr.
Chávez’s ideological agenda and demanding his pragmatic side. At stake are
no less than Venezuela’s economic stability and the sustainability of his
rule. With oil prices so low, the longstanding problems plaguing Petróleos
de Venezuela, the national oil company that helps keep the country afloat,
have become much harder to ignore.

Embracing the Western companies may be the only way to shore up
Petróleos de Venezuela and the raft of social welfare
programs, like health care and higher education for the poor, that have been
made possible by oil proceeds and have helped bolster his popular support.

Hugo ascended to Venezuela's Presidency largely because of his egalitarian platform. He was very critical of the government's over reliance on oil revenue; but under Chavez, Venezuela's government has become more dependant on oil revenue, not less. His rampant nationalization of the oil industry - along with booting out foreign oil companies - has led to poor management of vaunted oil fields, despite previously sky high oil prices. As stated below:

Venezuela may have little choice but to form new ventures with foreign oil
companies. Nationalizations in other sectors, like agriculture and steel
manufacturing, are fueling capital flight, leaving Venezuela reliant on oil for
about 93 percent of its export revenue in 2008, up from 69 percent in 1998 when
Mr. Chávez was first elected.

And

It claimed it produced about 3.3 million barrels a day throughout most of
2008. But other sources, like OPEC, of which Venezuela is a member, place the
figure closer to 2.3 million and show a fall of about 100,000 barrels a day from
a year earlier. When Mr. Chávez rose to power a decade ago, Venezuela was
producing about 3.4 million barrels a day.

Despite the previously high oil prices, despite the generous income brought, Venezuela never-the-less experienced an assortment of problems, such as sky high inflation and crime. Now with oil's recent "defeat at Waterloo," Hugo will face ever larger challenges in maintaining his vision of a socialist utopia... and may need to come crawling back to the capitalistic decadents he kicked out.