Venezuela

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Chávez has a pipe dream to oust the US


HUGO CHÁVEZ, the President of Venezuela, sees China as one of the keys to his revolutionary goal of driving the United States out of Latin America. The only thing holding him back is geography.

Venezuela’s state-owned oil company, Petróleos de Venezuela (PdVSA), is the fifth-largest exporter of oil in the world but, because of the proximity of the US, some 60 per cent of its production goes to America, accounting for roughly 12 per cent of all US imports of petroleum products.

PdVSA also owns several major refineries in the US, as well as the Citgo franchise, which has almost 14,000 petrol stations across the eastern United States.

Since supertankers cannot pass through the Panama Canal, the journey to Asia is long and expensive. For now, Venezuela exports only about 300,000 barrels of oil per day to China.

In its effort to gain access to the Pacific, Venezuela has signed an agreement with Colombia to build a pipeline to the port of Tribuga on the Pacific coast. An additional proposal with Panama would modify a Panamanian oil pipeline to facilitate shipping oil to the Pacific coast.

Venezuela is a tempting market for energy-needy China, possessing the western hemisphere’s largest oil reserves at 78 billion barrels, as well as 1.2 trillion barrels of super-heavy crude in the so-called “Orinoco belt”.

Oil industry experts question whether Chávez can achieve his objective of breaking away from the US oil market.

The Panama oil pipeline that he is interested in pumps 100,000 barrels a day of Ecuadorian crude (from the Pacific to the Atlantic) for Gulf Coast refineries.

The pipeline lacks the capacity simultaneously to ship Venezuelan oil to China in the opposite direction, analysts say. They also point out that Venezuela may be of only temporary interest to China, which is busy exploring for oil and gas closer to home in the South China Sea.

Chávez has invited the Chinese National Petroleum Corporation (CNPC) to participate in exploring the rich Orinoco belt. Meanwhile, the CNPC has invested $300 million (£160 million) in technology to use Venezuela’s Orimulsion fuel in Chinese power plants. PdVSA is also inviting the CNPC to invest in Venezuela, while calling into question existing contracts with US oil companies dating back to the 1990s.

Chávez has also hinted that he might sell off PdVSA’s interests in eight US refineries.

“Not one Venezuelan works at these refineries,” Chávez said. “They don’t give us 1 cent of profit. They don’t pay taxes in Venezuela. This is economic imperialism.”

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Venezuela stages mock foreign invasion

PUNTO FIJO, Venezuela (Reuters) - Venezuelan President Hugo Chavez has for years predicted that a foreign army would attack the South American nation to snatch its vast oil reserves. A simulation conducted this week showed how it might happen.

A naval landing craft made landfall on the shores of Western Falcon state carrying troops and over a dozen camouflaged tanks. The "invading" army then took over the massive Paraguana Refining Complex, a key asset of the world's No. 5 crude exporter.

The "occupation" is part of a military exercise to train troops and communities to repel a foreign invader.

The Chavez government said it is preparing citizens to fight a guerrilla war to repel a possible
Iraq-style invasion by U.S. troops. The Bush administration insists the invasion paranoia is nothing more than leftist saber-rattling, but for Chavez supporters the threat is real.

"They've already invaded us, now the invading forces are controlling certain strategic objectives," said Rear Admiral Zahin Quintana, a squadron commander, after disembarking from a warship as part of the exercise. "Now begins the resistance by our troops together with our people."

The tanks began circulating through the streets, and units of mock invading soldiers launched smoke bombs to clear the way. But local residents, organized and trained by military authorities, resisted the assault by blocking roads with rusting cars and burning tires.

"We're willing to go anywhere to defend our homeland," said Rosmery Trujillo, a participant in the operation, told state television. "This country will never again be put under the boot of the North, thanks to our President Chavez."

The simulated attack is part of a military operation called "Operation Patriot 2006" being carried out this week.

PREPARING FOR A FIGHT

Venezuela's government has created community organizations called "Local Defense Councils" that would provide support during a potential invasion by hiding weapons deposits, relaying messages or sabotaging water and power services.

Quintana said the mock attack involved nine warships, three combat planes and four helicopters -- two of which are Russian-made models Chavez started acquiring after the U.S. thwarted his attempts to acquire American technology.

On Friday, the mock invasion force is scheduled to be repelled by Venezuelans trained to defend the nation's strategic assets including oil terminals, fuel filling stations and tanker trucks.

Chavez, a former paratrooper turned populist politician, is locked in a heated war of words with Washington. The State Department describes him as a threat to democracy in the region, and this week said it would no longer sell weapons or military equipment to the South American nation.

Chavez describes the United States as a decadent empire accustomed to having sway in Latin America, and has called Bush everything from "assassin" to "donkey."

Despite U.S. criticism, Chavez is expected to easily win a reelection bid this December as massive social spending and the widely popular anti-American discourse have kept his approval ratings high.

Critics in Venezuela say Chavez is squandering record oil wealth on improvised social programs and creating an artificial conflict with the United States.

But with oil prices surging and anti-American sentiment high, many Venezuelans see the invasion threat as a reality.

"If oil goes to $100 per barrel?" said one high ranking officer. "Who knows? Anything could happen."

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As Venezuela's president, Hugo Chávez, insinuates himself deeper in the politics of his region, something of a backlash is building among his neighbors.

Mr. Chávez — stridently anti-American, leftist and never short on words — has cast himself as spokesman for a united Latin America free of Washington's influence. He has backed Bolivia's recent gas nationalization, set up his own Socialist trade bloc and jumped into the middle of disputes between his neighbors, even when no one has asked.

Some nations are beginning to take umbrage. The mere association with Mr. Chávez has helped reverse the leads of presidential candidates in Mexico and Peru. Officials from Mexico to Nicaragua, Peru and Brazil have expressed rising impatience at what they see as Mr. Chávez's meddling and grandstanding, often at their expense.

Diplomatic sparring has broken into the open. Last month, after very public sniping between Mr. Chávez and Peru's president, Alejandro Toledo, the country withdrew its ambassador from Caracas, citing "flagrant interference" in its affairs.

"He goes around shooting from the hip and shooting his mouth off, and that has caused tensions," Jorge G. Castañeda, a former Mexican foreign minister, said by phone from New York, where he is teaching at New York University. "The difference now is that he's picking fights with his friends, not just his adversaries."

Some of Mr. Chávez's gestures, like his tendency to tweak the Bush administration, or the aid projects he has bankrolled with Venezuela's oil money, still leave him popular, particularly among the poor.

But increasingly, the very image of the Venezuelan leader has come to stand for a style of caustic nationalism that many in the region fear, as the divisions provoked by the man who professes to want to unify his region have widened.

"He is beginning to overreach, wanting to be involved in everything," said Riordan Roett, director of Latin American studies at Johns Hopkins University's School of Advanced International Studies. "It's a matter of egomania at work here."

Mr. Chávez, for instance, has taken the uncompromising stand that governments must choose either his vision of continental unity or free trade with Washington, which Mr. Chávez blames for impoverishing the region. "You either have one or the other," he said. "Either we're a united community or we're not."

In late April, he exasperated Colombia, Ecuador and Peru by declaring that Venezuela would drop out of their trade group, the Andean Community of Nations, because the other three members were seeking free trade agreements with the United States. He has instead formed a trade bloc with Cuba and Bolivia's new Socialist government.

While the move was filled with political symbolism, analysts say it offers few real prospects for trade and threatens badly needed integration among Andean countries, which still depend on United States markets.

"Chávez's idea of sovereignty seems pretty selective," said Michael Shifter, a senior policy analyst at the Inter-American Dialogue policy group in Washington. "Chávez has been saying, in effect, 'You're either with us or against us.' For most Latin Americans that hubristic message doesn't go over very well, whether it comes from Washington or Caracas."

The sparring with Peru's government erupted last month after President Toledo said it made no sense for Mr. Chávez to criticize his Andean partners for dealing with Washington when Venezuela sells most of its oil to the United States.

But he saved his strongest words for Mr. Chávez's general involvement in Peruvian affairs.

"Mr. Chávez, learn to govern democratically," Mr. Toledo said. "Learn to work with us. Our arms are open to integrate Latin America, but not for you to destabilize us with your checkbook."

When Alan García, a candidate in Peru's June 4 presidential election, also took Mr. Chávez to task, the Venezuelan president responded with, among other things, an endorsement of his opponent.

"I hope that Ollanta Humala becomes president of Peru," Mr. Chávez declared, backing Mr. García's nationalist opponent, who has modeled himself on the Venezuelan leader. "Go, comrade! Long live Ollanta Humala! Long live Peru!"

Mr. Chávez called Mr. García, a former president whose tenure was marred by corruption scandals, "shameless, a thief," and warned that if he were elected "by some work of the devil," Venezuela would withdraw its ambassador.

But it was Peru that made the move first. Venezuela soon followed, and the Chávez government responded by calling Mr. Toledo an "office boy" for President Bush. Mr. García benefited handsomely, taking a long lead in the polls.

Surveys showed Peruvians had little patience for Mr. Chávez's interference. Only 17 percent of Peruvians said they had a positive view of the Venezuelan leader, the Lima-based Apoyo polling firm found.

In Nicaragua, Mr. Chávez has thrown his support behind Daniel Ortega, the former leader of the communist Sandinista revolution, who is running for president in November elections.

"I shouldn't say I hope you win because they will accuse me of sticking my nose into Nicaraguan internal affairs," Mr. Chávez told Mr. Ortega, who was invited on his radio show in late April. "But I hope you win."

Mr. Chávez pledged to supply cheap fuel to a group of Sandinista-run towns. The gesture was interpreted by opponents as a naked ploy to influence the vote and criticized as a backhanded way to funnel money to the Ortega campaign.

Nicaragua's government called on Mr. Chávez to stay out. "We hope this partisan support comes to an end so that Nicaraguans can freely choose who we want to be the next leader of Nicaragua," Foreign Minister Norman Caldera told Nicaraguan television this month.

The American ambassador to Nicaragua, Paul A. Trivelli, speaking to Nicaraguan media, accused Mr. Chávez of "direct intervention," but analysts said it was too soon to say what effect Mr. Chávez would have on the vote.

In Mexico, the leftist candidate in the July presidential election, Andrés Manuel López Obrador, has labored to distance himself from Mr. Chávez, to no avail.

When he made a slip of manners recently, calling President Vicente Fox a chattering bird and telling him to shut up, his conservative opponent, Felipe Calderón, ran a series of attack advertisements intercutting the gaffe with images of Mr. Chávez, whose tendency to hurl insults is a trademark. (He has called Mr. Bush a drunkard and Mr. Fox a "puppy dog of the empire.")

In recent weeks, Mr. López Obrador's lead in the polls has evaporated, and he now trails his opponent.

The disputes are not limited to politics, however, but also touch important national interests.

Mr. Chávez, for instance, encouraged and quickly supported Bolivia's nationalization of its energy sector this month, a move that infuriated Argentina and Brazil, which depend on Bolivian natural gas.

Though Venezuela was not a party to the dispute, Mr. Chávez joined a meeting of leaders from Brazil, Argentina and Bolivia aimed at calming the crisis, and dominated a news conference afterward, upstaging even his Bolivian protégé, President Evo Morales.

President Luiz Inácio Lula da Silva of Brazil, steward of South America's largest economy and nominally a left-wing ally of Mr. Chávez, was particularly humiliated. Celso Amorim, the foreign minister, was called before senators and quizzed about Brazil's weak response. He said Mr. da Silva had admonished the Venezuelan leader in a private phone call, telling him that the Bolivian move could jeopardize Mr. Chávez's dream of a 5,000-mile pipeline to carry Venezuela's gas to Argentina.

Mr. da Silva also rebuked Mr. Chávez, he said, for involving himself in a dispute that Brazil is having with Uruguay and Paraguay over their trade bloc, Mercosur, saying Mr. Chávez's role was "a stimulant to activities incompatible with the spirit of integration."

The wounds have yet to heal. Jorge Viana, the governor of Acre state in Brazil, and a crucial ally of Mr. da Silva, told Brazilian radio last week that Mr. Chávez's meddling was "lamentable." He criticized Mr. Chávez's "precipitated decisions to interfere in the internal affairs of Bolivia, Peru and, by extension, those of Brazil." Mr. Chávez, he said, "needs to calm down."