Bush and ExxonMobil v. Chavez

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."

We must "warn our country because they could continue

this type of action....the position of our people and

our Government is firm in defence of our decisions."

We will defend our interests. We won’t "yield to this

(action), we will defeat them (on the) ground(s) that

(are) raised...."

In a February 12 interview, Ramirez repeated Hugo

Chavez’s message two days earlier on his weekly Sunday

television program, Alo, Presidente: "If you end up

freezing (our assets) and it harms us, we’re going to

harm you. Do you know how? We aren’t going to send oil

to the United States. Take note, Mr. Bush, Mr.

Danger....I speak to the US empire, because that’s the

master: continue and you will see that we won’t send

one drop of oil to the empire of the United

States....The outlaws of ExxonMobil will never again

rob us....If the economic war continues against

Venezuela, the price of oil is going to reach $200 (a

barrel) and Venezuela will join the economic

war....And more than one country is willing to

accompany us in the economic war."

PDVSA spokesperson, Eleazar Diaz Rangel, then said on

Latest News on February 12 that "we are ready" to stop

supplying oil to the US if their hostile actions

continue. He explained that Washington is waging

economic war, and Venezuela is seeking to develop new

customers like China. He added that the cash flow of

the company is sound because it’s based on daily crude

oil sales.

On February 12, Venezuela’s deputy oil minister,

Bernard Mommer, said on state-owned Venezolana de

Television that Exxon knows it will lose in

arbitration and its "maneuver represents a way to

intimidate" other countries against standing up to its

will. It’s trying to "create panic and anxiety with

the banking and the oil sector."

Venezuela is America’s third or fourth largest oil

supplier after Canada, Saudi Arabia and at times

Mexico. It accounts for between 10 to 12% of US

imports and averages around 1.2 million barrels a day,

sometimes as much as 1.5 million. PDVSA’s assets total

around $109 billion, according to its web site. It

calls itself "the most creditworthy company in Latin

America" which is likely considering its enormous oil

reserves and at their current elevated prices.

Views from the US Media

It’s no surprise how the US media portray Chavez and

the Exxon dispute. Bloomberg.com called it his way to

use the "Exxon Battle to Stoke Anti-US Sentiment" as

though he’s the aggressor and poor USA and giant Exxon

his victims.

Then, there’s the Washington Post’s editorial view on

February 15. It’s astonished that "Mr. Chavez himself

threatened to cut off exports of crude oil to America"

over Exxon’s having "moved to freeze" its assets. It

lamentes how "regrettable" the US "voracious

consumption of oil" is because it "underwrites

Venezuela’s Chavez regime....If the Bush

administration were really as committed to

overthrowing Mr. Chavez as Mr. Chavez claims (it ought

to boycott) Venezuelan oil (to) devastate" its

economy. "Two cheers for ExxonMobil. In standing up to

Mr. Chavez through ’peaceful, legal means,’ it has

once again exposed the hollowness of the

anti-imperialism with which he justifies his rule."

The Chicago Tribune was just as hostile by asking

"Where is the king of Spain when we need him?" Chavez

"says the ’bandits’ at Exxon are trying to rob

Venezuela. From where we sit, it looks like the other

way around."

Then there’s the Houston Chronicle in Exxon’s home

city. It blasted Chavez for "making a fool of himself

on the floor of the UN General Assembly last year,"

called him a "clown," and said "his buffoonery is

neither amusing nor benign." Ignoring Exxon’s

shenanigans in cahoots with Washington, it stated that

Chavez "was in full bluster (and that he) and his

henchmen (were launch(ing) a war of words in response

(that is) little more than political theater, sound

bites for the loyalists back home, and You Tube fodder

abroad."

This type bluster gets supplemented with outrageous

comments about how Chavez "seized power," shuts down

his opposition, control’s Venezuela’s media, took over

American oil fields, is a "destructive menace" to the

region, and even worse a communist and a dictator with

a terrible human rights record. Is it any wonder that

Americans know almost nothing about Venezuelan

democracy and the man who shaped it for the past nine

years. Under his leadership, it’s the real thing, is

impressive and improving. Compare it to America where

"The People" have no say, democracy is nowhere in

sight, and under the Bush administration it’s

pretense, lawless, and corrupted.

What’s Going On and What’s At Stake

Throughout most of the last century, and especially

post-WW II, America’s international relations have

been appalling and destructive. It’s the world’s

leading bully, it practices state terrorism, disdains

democracy, defiles the rule of law, tramples on human

and civil rights, demands unquestioned obedience, and

rules by what Noam Chomsky calls "the Fifth Freedom"

that shreds the other four: to "rob, to exploit and to

dominate society, to undertake any course of action to

insure that existing privilege is protected and

advanced." Outliers aren’t tolerated, national

sovereignty is sinful, independence is a crime, and

dare disobey the imperial master guarantees certain

punishment.

William Blum documented the history in three editions

of his book, "Rogue State." He wrote: "Between 1945

and 2005 the United States has attempted to overthrow

more than 50 foreign governments, and to crush more

than 30 populist-nationalist movements struggling

against intolerable regimes. In the process, the US

has caused....several million (deaths), and condemned

many millions more to a life of agony and despair."

Washington won’t tolerate nations that won’t:

— "lie down and happily become an American client,"

— accept free market capitalism and today’s

steroid-enhanced neoliberal version that’s even more

predatory,

— sacrifice its peoples’ welfare for ours,

— "produce primarily for export,"

— allow dangerous environmental dumping on its soil,

— surrender to IMF, World Bank, WTO and international

banking rules; accept exploitive structural

adjustments and debt slavery as a way of life;

— relinquish control of its natural resources,

especially if they’re large oil and gas deposits,

— surrender all freedoms and call it democracy,

— permit US military bases on its soil, and

— agree unquestionably to all other imperial demands.

Countries unwilling to oblige are called "bad examples

(and) reduced to basket cases." In addition, their

leaders are replaced by "friendlier" ones. It’s an

ugly story of the rich against the poor, the monied

interests against all humanity, and if outliers are

tolerated, they’ll be "bad examples" for others to

follow.

Chavez became one of them after his 1998 election.

Ever since, he’s been a thorn in America’s craw and

its greatest threat - a "good example" that’s a model

for other nations. He also inspires social movements

throughout the Americas, even though none so far are

dominant or even even close, and he shows signs of

wavering on some of his earlier commitments. More on

that below.

Imperialism is safe in the Americas, and James Petras

explained it in his new article: "Movements in Flux

and Center-Left Governments in Power." He states: "The

singular fact about Latin America is that, despite a

number of massive popular upheavals, several regime

changes and (some ascendant) mass social movements,

the continuity of property relations remains intact."

In fact, they’re more concentrated, "giant

agro-mineral export enterprises" are prospering, and

"class structure (and) socio-economic inequalities"

persist, even though Hugo Chavez stands out, in part,

as an exception. Petras calls him "pragmatic."

He "reversed (some of) the corrupt privatizations of

previous rightest neo-liberal regimes," but still

supports business. Nonetheless, Washington sees him as

a threat because he embraces participatory democracy,

practices redistributive social policies, and

envisions a "new socialism of the 21st

century....based in solidarity, fraternity, love,

justice, liberty and equality." Those ideas and his

expressive language are anathema to America and its

hard line neoliberal model.

As a result, he tops George Bush’s target list outside

the Middle East, and that status won’t change under a

new administration in 2009, especially if a Republican

heads it. But even Democrats are hostile. When

candidates discuss Latin America, Chavez is Topic One

and their comments aren’t friendly.

Earlier (but no longer), John McCain’s web site was

outrageous. It featured a petition to "stop the

dictators of Latin America" and supported ousting

Chavez "in the name of democracy and freedom

throughout the hemisphere." He lashed out at a news

conference in Miami’s Little Havana stating that

"everyone should understand the connections" between

(Bolivia’s) Evo Morales, Castro and Chavez. "They

inspire each other. They assist each other. They get

ideas from each other. It’s very disturbing." He also

calls Chavez a "wacko" and a "two-bit dictator."

These comments aren’t surprising from a man who headed

the hard right International Republican Institute

(IRI). Along with the National Endowment for Democracy

(NED) and USAID, these organizations front for

imperialism, support rightest dictators, and plot the

overthrow of independent democrats like Chavez who

dare confront America.

Think hard about this man from what his fellow

Republicans say about him. Some call him

psychologically unhinged and unqualified to be

president. Mississippi Senator Thad Cochran said: "The

thought of (McCain) being president sends a cold chill

down my spine." Others from the far right, like

Alabama’s Dick Shelby, former Pennsylvania Senator

Rick Santorum, and Oklahoma’s Jim Inhofe, mention

times McCain screamed four-letter obscenities at them

in the Senate cloak room. Another senator said: "He is

frighteningly unfit to be Commander-in-Chief."

Along with these unsettling comments, there are

disturbing allegations about McCain’s POW years and

reported special treatment he got after his father,

Admiral JS McCain, became CINCPAC Commander-in-Chief,

Pacific Command over all Vietnam theater forces. An

organization called "Vietnam Veterans Against John

McCain" is actively addressing his record on things

people have a right to know about public officials, if

they’re true, and McCain has an obligation to explain

them.

Democrats aren’t much better, and consider their views

about Chavez. They’re hardly friendly with Hillary

Clinton saying "we have witnessed the rollback of

democratic development and economic openness in parts

of Latin America" with no confusion about who she

means. Barack Obama is also suspect despite saying if

elected he’ll meet with Iranian, Cuban, Syrian and

Venezuelan leaders. It sounds good until he qualifies

it and spoils everything. He labels these countries

"rogue states," reveals his real feelings, and signals

his hostility and unwillingness to establish good

relations with them.

Forget Obama’s friendly smile, comforting demeanor and

reassuring rhetoric. Bottom line - he’s no different

from the rest. There’s not a dime’s worth of

difference among them that matters. Next January,

they’ll be a new face in charge with the same agenda:

wars without end; subservience to the monied

interests; disdain for the common good; and deference

to the dominant media view that Chavez is: an

authoritarian, a strongman, a dictator and what Wall

Street Journal columnist Mary Anastasia O’Grady calls

him: anti-democratic, dictatorial, vengeful, bullying,

crude, unpopular, and having "an insatiable thirst for

power that should give Venezuelans reason to be

fearful."

Forget that under Chavez Venezuelan business is

booming or how gracious he was in defeat last December

after voters rejected his constitutional reforms.

Petras assessed what followed. Centrist and other

influential Chavez advisors jumped on the setback and

"pressed their advantage to secure programmatic,

tactical-strategic and organizational changes." They

got him to replace over a dozen cabinet ministers and

others in government with new faces sharing their

views. They also, to a degree, shifted Chavez to the

center, influenced him to "slow down....the move to

socialisma, (establish) economic ties with the big

bourgeoisie, (halt) immediate moves to nationalize

strategic economic enterprises, and (move slowly) in

reforming land tenure."

In addition, they got him to ally "with the middle

class center-right parties, and (won) them over (by

eliminating) price controls to let "basic food

prices.... soar, while salaries remain stagnant." The

result: a fundamental contradiction in trying to

advance socialism by "liberalizing economic policy."

Petras is worried that Chavez’s base (the urban poor)

"will lose interest, abstain or resist the centrists

and withdraw their loyalties." Indignation is

surfacing, loyal Chavez support may be jeopardized,

and it "raises fundamental questions about the

long-term future of state-class movement relations

under" his leadership.

In addition, rightest forces see an opening, are

pressing their advantage, Exxon’s move is a warning

shot, and so are reports about Colombian

paramilitaries entering the country in greater

numbers. More destabilization will follow, and

continued efforts will be made to weaken Chavez, then

try to oust him. More than ever, he needs strong

support at a time it’s jeopardized, and that’s a

worrisome situation to consider. Venezuela’s

Bolivarianism is glorious provided it flourishes,

grows and achieves its long-term goals. It’s been

extraordinary so far, still has miles to go, and it’s

unthinkable to waiver now and pull back.

Petras alarmingly notes that when "social movements

(adopt common) electoral strategies, (work) within the

framework of institutional politics, and (ally) with

center-left regimes....few positive reforms and

numerous regressive" ones result. Will this be

Venezuelans’ fate? The prospect is frightening because

if not Chavez, who’ll lead their struggle for social

equity and justice - for the nation, the region and

beyond. Bolivarianism is glorious and vibrant. But to

flourish, grow and prosper, it needs care and

nurturing from a resolute leader backed by mass

popular support.

---

Stephen Lendman lives in Chicago and can be reached at

lendmanstephen @sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and

listen to The Global Research News Hour Mondays on

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time for cutting-edge discussions of world and

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