The Devil's Excrement

Last Saturday I suggested that the decision by the Comision Nacional Electoral (CNE) last Friday, could simply indicate that there was a trap for us waiting to happen. Today, I feel that the country’s democracy may be at a tuning point if the proposed regulations for recall referenda by the CNE, which were revealed today, are approved as they are in tomorrow’s session. The regulations, drawn by the CNE’s legal department, essentially would make it practically impossible to have a referendum take place in any reasonable time frame, would make it difficult for the opposition to gather the signatures necessary and steal the initiative of the petition drive away from the people and into the hands of the Government. Basically, the CNE controls the process and turns the petition drive into an election, simply perverting what it is supposed to be. The proposal shows that the pro-Chavez forces simply have no scruples and are willing to disguise their attempts to block the recall referendum with the appearance of legality. Here is an analysis of the regulations being proposed and what they really might mean in practice. Keep in mind throughout this article that the Venezuelan Constitution establishes limits of time for the handling of a petition for a referendum:

–          Article 14: The request to initiate the procedure for a recall referendum ….must be presented to the CNE fulfilling the norms established. Thus, one can not gather signatures at will; one has to ask permission to do it. Does that sound like a petition for a referendum?

–          Article 15: The request will be made in writing ….by the groups promoting the recall which have to be registered in the CNE. As determined last week, now you have to register to request a referendum, but this means you have to declare yourself a political party, so other groups can not do it. I think this is not democratic and makes a mockery of the term “popular initiative” used in the Constitution to describe how a recall can be activated.  

–          Article 19: ….The CNE will have three working days to accept the request. Now, this is weird why should this step exist at all? What are the grounds for saying no? Is this one more block on the way? In any case, it takes three working days, so the count is + 3 working days so far.

–          Article 20: The CNE will establish the electoral centers as centers for the collection of signatures and the duration of time under which the signature collection process will take place, which in any case, will fall under the supervision of the CNE. Very sneaky. First of all, the CNE controls the whole process, second, it establishes the time frame, it could be just one day or it could be many. Third, the CNE will say where the signature drive may take place. Thus, nothing will be under the control of those making the petition drive. In fact, just the fact that petitions have to be signed at a specific place will be a big limitation in the barrios where people might be intimidated into not signing the petition by chavista thugs. In fact, in the February drive, many people from the barrios went to other areas to sign up. Additionally, the CNE could assign centers in such a way as to make it difficult for the opposition to get the required signatures. It could also choose public schools, for example, as the places where the gathering of the signatures takes place, but the Minister of Education could argue that this can not happen until the next vacation time as it has happened in the past. This could add time to the process, but can not be quantified. At least two months more.

–          Article 21: The form will have….…2) signature and fingerprint. You be the judge, never in the country’s history have both been required. What is the objective? To intimidate? Database? Absolutely ludicrous.

–          Article 22: The petition will be filled and signed at the electoral centers in the presence of CNE officials designated for such an effect by the CNE. The groups promoting or not the petition drive may ask to have witnesses or observers. Now, this is absolutely ludicrous. Just by accepting this, the CNE will be able to argue that it needs time to prepare the officials as well as giving time to those opposing the drive to “prepare” their people for the event. This alone could take weeks and it certainly sounds almost like an election in itself, which is not supposed to be.

–          Article 24: a) The data will be transcribed… Imagine three million names, numbers transcribed. How long will this take. Weeks it’s my guess. b) The data will be validated. i. e. every single name will be checked, this was not done in the referenda to hold a Constituent Assembly or approve the Constitution. Is this fair? Whatever happened to sampling? Another month at least.

–          Article 27. Ten days following the transcription of the data any voter…. i.e. Add ten days to the undetermined time to transcribe the data…..Ten more days

–          Article 30: The recall referendum will take place …..within 120 days of the approval in the case of national referenda. Now, the Constitutions says it is supposed to be ninety days tops, the CNE wants to add 60 days only with this article. 120 more days.

Total additional time 3 days+ten days+two months+one month+four months=7 months ten days and three days, minimum! We are talking June 2004. Compare all of this with the opposition gathering the signatures in its own drive Oct. 3d. 4d. and 5^th. , handing the signatures on the 15^th. and forcing the CNE to hold the referendum as the law establishes within ninety days of that day or find a reason to reject it., i.e. January 15^th.

Thus, the total time is not only uncertain but we may be talking many months with all the uncertainties, times and technicalities involved. Recall also that the law says that after Aug. 19^th. 2004 the Vice-President, who is named by the President by decree, becomes the President is Chavez is recalled. The timeline as described above could easily reach that date. Then, Chavez and his revolution will finally kidnap all of the institutions and there will be no hope for any of us that want to live in freedom. It is that simple, tomorrow is “D” day, if the country and the world allow the Chavistas to get away with these regulations, it will be a shameful day for democracy everywhere.

I am sure that some people will try to draw parallels between the three judge panel  canceling the California recall and the decisions taken in Venezuela to block the recall referendum. To me it simply shows that the same biased, partial and corrupt judges and politicians exist all over the world. In fact, the California decision is as absurd as the ones here. Among other reasons:

-If the voting machines are not good enough for the vote on the recall, they should not be good enough to vote on anything, whether candidates or issues until the problems are solved. Thus no election should take place until it is fixed. But this does not make sense either.

-Should Democracy be in suspended animation until the problems are solved? For how long? When is form more important than substance? When should the will of the people be more important?

-The three Judge panel is composed of three Democrats and is supposed to be the most liberal (read pro-Democratic party) in the US. And we thought we had it bad here in Venezuela with the Electoral Board being three to two against us.

-I would like to ask: Are these the same voting machines with  which Davies was chosen as a candidate for the Democrats and was later elected as Governor? Did anybody complain then? Should his elections be erased too in the interest of Justice or Democracy?

-I hate to be innovative or futuristic, but couldn’t they use something like pencil and paper to vote with? Too complicated? People don’t know how to write anymore? People can cheat with paper ballots?

I think in the end the difference is very clear, in every country there are biased, politically corrupt people or individuals with a limited understanding of what democracy truly is. Form can never replace substance and the people’s participation is indeed at the conceptual foundation of Democracy. The difference is that while Democracy has been suspended in Venezuela since January 23d. of this year, I will bet that a quick solution is found to the California problem short term by a system that still functions. People are the same all over, the difference is that in California the system still has checks and balances. Here we don’t, in Venezuela all we have is the citizens fighting for their freedom versus a system that only responds to the whims of one power hungry person. By this time next year, Californians may not even remember this episode, we Venezuelans may not be able vote for years to come……As simple as that.

Some Chavista officials, including Minister of Education Aristobulo Isturiz and Deputy Cilia Flores made statements last Friday that if the CNE rejected the request for the recall referendum on the part of the opposition, then the opposition would not be able to submit another request because Article 72 of the Venezuelan Constitution says that only one request for a recall can be introduced during the period of an elected official. This has created a lot of frustration and uncertainty within the opposition, and I have even heard people saying that why should they waste their time if the new request might be rejected. (I fault the press partially for this, as the questioning by these ignorant Government officials was quickly propagated by some equally ignorant reporters). This issue was indeed clarified by the Venezuelan Supreme Court on June 2nd. 2002 in a decision that leaves very little room for interpretation. Here is the text, the highlights are mine, in both Spanish and my very liberal English translation (more so when it is a judicial decision). Please distribute it by e-mail so that people are aware of it:

“Igualmente, estima esta Sala desacertado el planteamiento efectuado por los recurrentes, cuando solicitaron se interpretara el último aparte del artículo 72 de la Constitución, con respecto a que “no podrá hacerse más de una solicitud de revocación”, por cuanto pese a que insisten en que ha surgido en ellos la duda interpretativa, lo cierto es que se advierte que la referida solicitud de interpretación constitucional no se apega a los lineamientos establecidos por la jurisprudencia antes transcrita. Al respecto, considera la Sala que el último aparte de la disposición mencionada es claro y preciso, y no posee ninguna contradicción o ambigüedad, toda vez que cuando establece que en todo caso no puede hacerse más de una solicitud de revocación del mandato durante el período para el cual fue elegido el funcionario o funcionaria, es palmario que se refiere a que dicha solicitud haya sido efectuada en cumplimiento de los requerimientos que la propia norma constitucional exige y, por ende, declarada su procedencia por el órgano electoral, dado que la solicitud que no reúna esos requisitos, no produce efectos ni puede considerarse válida y, menos aún, como impedimento o límite para la recepción y tramitación de una nueva solicitud de convocatoria a referéndum revocatorio. En definitiva, el límite que la norma establece se halla en que se celebre o active sólo un referéndum revocatorio para el mismo funcionario y en el mismo mandato. Por consiguiente, estima la Sala que la solicitud planteada en el sentido señalado no es susceptible de interpretación alguna, resultando de esta manera improcedente el recurso de interpretación constitucional en cuanto a dicha pretensión se refiere, y así se declara.”

Liberal English Translation:

Similarly, this Hall considers incorrect the proposition made by the plaintifs, when they  requested that we interpret the last part of Article 72 of the Constitution with respect to whether “no more than one request can be made for a recall referendum”, because even if they insist that there is a doubt in interpretation, the truth is that the request for a constitutional interpretation does not fulfill the requirements established by prior jurisprudence. To that effect the Hall considers that the last part of the article is clear and precise and has no contradiction or ambiguity, because when it establishes that no more than one request for a recall referendum may be made during the period for which the official is elected to, it is clear that it refers to the fact that such a request has been made  fulfilling  the regulations that the Constitutional norm requires and thus has been accepted by the electoral board, since a request that does not fulfill the requirements, produces no effects nor can be considered valid, even less is an impediment or limit to process a new request for a recall referendum. In concluding, the limit that the norm establishes is in that only one recall referendum be activated or take place for the same elected official in the same period. Thus, the request is not susceptible to be interpreted …”

Thus any other interpretation seems to me be absolutely out of the question. Pass it on!

(Even the foreign press has fallen for the Chavista line, as reported by the LA Times, sent in by Russel)

Some additional observations of the CNE decision on Friday:

-Article 50 of the Organic Law of Administrative procedures: In the case of formal defects that may affect request from the public administration…there is a right to correct them, which implies, in general terms, the right of the presenter for the administration to advise him of the errors and give him 15 days to correct the errors”. Need I say more?

–Article in page A-2 of El Universal “Hunting swallows with cannons” by José Peña Solis a former President of the Electoral Hall of the Supreme Court (named by the Chavez administration), who says among other things:

“the CNE ignored the substantive elements which constitute the nucleus of the right to participate , guaranteed in Article 62 of the of the Constitution…..the CNE ignored the fundamental right, did not fulfill that imposes on it the Constitution in Article 62 of the Constitution that it has to “facilitate the generation of conditions favorable for its practice, since it is obvious that which a decision like this one, far from facilitating the exercise of the law, it proceeded to block it and almost sacrifice it. ….An old basic principle of law says that formal problems of an act or request have the character of irregularities which do not invalidate…….when the reasoning of the untimeliness of the signatures, the first thing that is observed is that it ignores the binding doctrine of the decision by the Constitutional Hall on 2-13-2003, and in the supposition that it did not estimate that this was binding, then, given that it was a problem with form, what would have corresponded was to correct it, publishing the signatures and opening a period for all those that had signed to have the possibility of retracting themselves on the basis that In February it was evaluation the President’s performance negatively and now it considers it to be positive…..I think that there is a lack of proportionality in the decision (invalidating more than three million signatures due to formal defects), in this perspective it reveals an inexcusable judicial error…..”

-Finally, the biggest irony of the decision to tell Sumate that it could not legally submit signatures the National Electoral Council is the fact that article 296 of the Venezuelan Constitution says that the members of the CNE will be persons with no political affiliation, something that would invalidate the presence in that Board of two of the members that voted in favor of the resolution and one of the ones that abstained. Does this make their decision unconstitutional? Moreover, according to the Constitution, political parties can not name candidates to the CNE, but supposedly only parties can make requests in front of it. Does this make sense?……..

Intuitively the decision by the Consejo Nacional Electoral (CNE) yesterday makes me very nervous. While the decision was expected, I got the feeling that it went beyond where it should have, left many question marks in the air and used language to justify the reasons which to me are simply subjective and have no legal basis. This makes me nervous, because while I favored the path of gathering the signatures again to shield them from questioning, I can’t help but feel that there is a trap somewhere in our future and we are just walking innocently into it.

The Electoral Board cited three main reasons for rejecting the signatures:

-The gathering of the signatures was untimely. To reach this conclusion, the Board used two reasons. One, a decision by the Venezuelan Supreme Court issued last year in July which said that the signatures had to be gathered. Two, that the person elected had to be given sufficient time to develop his/her program. On the first one, I do not understand why the February decision by the Constitutional Hall, which said the signatures can be gathered before the date set by the Constitution was not even mentioned. How can the CNE selectively use one decision and not the other? Even more, how can the earlier decision be more important than the other one? On the second reason of giving Chávez sufficient time: How come the CNE did not take into account that Chavez’ term is actually longer than the three years mid-point set by the Constitution. By reasons of the Constituent Assembly, his period was rest and he has been in power for four and a half years in a country which has a Constitution that sets the Presidential term is six years. Thus, the argument seems to be spurious and irrelevant.

-The question asked in the petition is a proclamation and not a request of the CNE to organize the referendum. First of all, given that there were no rules or regulations for calling for a referendum and given that the Venezuelan Constitution says that power resides in the people, why can’t it be a proclamation. And even if the form is wrong, what is more important the will of close to three million people that signed the petition or the formality defined after the fact? In fact, when the referendum to ask for a Constituent Assembly was held, the question was changed after the petition had been introduced to the CNE. Why the difference.

-The third reason was that Sumate, the volunteer organization which coordinated the gathering of the signatures is not “a political organization or registered in the CNE”. Now, this part I found absolutely out of the question. This is saying that anyone gathering signatures for any petition for whatever purpose has to be a political party and that a group of concerned citizens can not act independently to gather signatures for whatever cause. This one bothers me both from the fundamental point of view, the decision seems very undemocratic, but it also bugs me because the Chávez administration hates Sumate because of the efficiency with which it ahs managed to gather signatures for two referenda (both now denied), exceeding expectations and at a fraction of the cost of any Government promoted activity., The Chavez administration has been trying to disqualify Sumate both morally and legally, but ahs been unable to do so. With this, it is relegated to a secondary role, which it does not deserve and which may impact the result of gathering the signatures anew.

The decision was taken by a three of the five members of the CNE, with the other two abstaining (Not like Juan Forero of the New York Times who reported that it was by a 3-0 vote and only clarifying later in the paragraph that two abstained, making it sound in his usual sneaky way like it was a unanimous decision). The votes were clear, the two pro-Chavez members voted in favor, the two opposition members voted against and the President who is considered to be Chavista-light, voted in favor. (In related news, one of the four members of the Advisory Board for the CNE created by the Supreme Court resigned, supposedly for unrelated reasons, he was considered to be pro-Chavez but fairly independent)

On the positive side, the CNE will issue regulations by Wednesday on how to request a referendum which will make it very clear for the opposition how to do it in such a way that it will not be blocked once again. Another intriguing, if not positive, note was the fact that the President of the CNE made reference three times in his decision to the agreement signed last May by the Government on the opposition in which both sides agreed to back the idea of the referendum.

From a legal point of view, resubmitting the signatures according to the regulations to be issued by the CNE has the advantage that it would be much more difficult to question them from a legal point of view. Had the signatures been approved, pro-Chavez forces could have gone to the pro-Chavez Electoral Hall of the Supreme Court and challenged them, which would be much more difficult next time. At the same time, any attempt to block them when they are resubmitted, could be challenged in the Constitutional Hall as a denial of the basic right to vote.

The opposition will gather the signatures again on Oct. 5th. and hand them in soon after that. It seems quite difficult for the referendum to be held this year, but if there are really no traps or tricks on the way, it should take place in January. Somehow though, yesterday’s decision makes me very uneasy, making me think that this is all very well planned and staged and a surprise against it is waiting for us around the corner.

The Venezuelan Electoral Board decided today to reject the signatures submitted by the opposition to request a recall referendum for President Hugo Chavez. The expected decision was based on a number of technicalities, which will certainly be challenged by someone in the opposition. Prominently among them, the CNE cited that the request for a referendum has to be addressed to the Electoral body, which was not done in the petition submitted by the opposition. Additionally, the CNE ruled that the gathering of the petition was untimely, colliding with the time frame established by the Constitution for requesting a recall referendum. Finally, the CNE said the data contained in the petition itself was insufficient.

 Rumors of the negative decision by the CNE were widespread all week, as the recommendation by the legal department of the electoral body had leaked to the press. Súmate and the Democratic Coordinator have already drawn plans to gather the signatures anew, an event which is now planned for September 28^th., as long as the CNE issues the regulations before that date, which it ahs promised to do.

The decision falls within the Government’s strategy of delaying the recall referendum using legal maneuvers. In this case, the law limited the length of the possible delay by the fact that the CNE had to reply to the request for the referendum within thirty days.

From the point of view of the opposition the decision might actually be quite positive, despite the delay it implies. By gathering the signatures again, the opposition will adjust the petition to the CNE’s requirements, making it more difficult for the Chavistas to question it legally later, and in effect shielding the petition from legal questioning. Similarly, by holding a new “Firmazo”, where the signatures will be massively gathered on a single day, that public display will become in itself a judgment on the Government. In February, the opposition gathered over 3 million signatures of which Súmate certified 2.8 million in its audit; this is 20% more signatures than required to validly request a referendum. Given the increased dissatisfaction and frustration with the Government and the continued deterioration of the economy, the opposition might gather more signatures this time than the votes necessary to recall Chavez’ mandate. Under the Bolivarian Constitution more voters have to vote for the recall than the number of votes received by the officer when he was elected.

I will comment more on the decision tomorrow when I have the full text. I am concerned about some of the reasons given, it seems to me that technicalities not previously defined by the law have been considered more important than the will and rights of close to three million people.

Sorry for not posting much this week, I have had a  mild cold that has nevertheless drained a lot of energy and limited my time and capacity to contribute, but beware, I am back!

Article by Marc Lifsher in the Wall Street Journal about the increasing dependence of Venezuela on foreign oil firms in contrast with Chavez’ claim that he was making PDVSA The people’ company” Since it is by subscription here is the full article:

CARACAS, Venezuela — This country’s leftist president, Hugo Chavez, likes to talk about turning the state oil monopoly into a “people’s company.” But in reality, Venezuela is becoming increasingly dependent on foreign companies to boost lagging production.

An anti-Chavez strike at the state oil company in December and January led to the dismissal of 18,000 workers. Critics charge that it also stripped Petroleos de Venezuela SA, or PdVSA, of the expertise and financial wherewithal to maintain natural-gas and oil fields and explore new ones. Venezuela‘s oil output, which was about 3.2 million barrels a day before the strike, is now 3.3 million barrels, PdVSA officials claim. But international oil experts peg output much lower, at 2.5 million to 2.8 million barrels a day.

Meanwhile, they figure crude-oil production by foreign companies has soared to between 800,000 and one million barrels a day compared with 360,000 barrels when Mr. Chavez became president in 1999. Although PdVSA’s petroleum activity contracted year-on-year 7% in this year’s second quarter, private-sector activity jumped 46%, according to Venezuela‘s central bank.

“PdVSA has been weakened to such a level now that it has to rely on the private sector to maintain or increase production,” says David Voght, a Caracas-based consultant with IPD Latin America. Officials at the Ministry of Mining and Energy, which speaks for PdVSA on policy issues, didn’t respond to repeated requests for comment.

Venezuela nationalized its oil industry in 1976, effectively closing it to foreign companies. However, in the mid-1990s, Caracas began allowing limited foreign investment for revitalizing older fields and developing new technology to tap deposits of tar-like heavy oil. While Mr. Chavez honored those contracts, he signed legislation in 2001 that was seen as a disincentive to investment because it greatly increased royalties on crude oil. At the same time, he approved a bill that opened natural-gas business to foreigners.

While interest in new crude-oil ventures has been tempered by the higher royalties, an increasing number of foreign firms are testing the waters as Venezuela opens a second round of competition for offshore natural-gas leases. Thirteen companies, including such distant actors as Russia‘s OAO Lukoil, bought data packages.

ConocoPhillips has been particularly aggressive in Venezuela. The Houston-based firm is operating two heavy-oil projects, developing a large oil-and-gas field near Trinidad and exploring for natural gas, along with ChevronTexaco Corp., near the mouth of the Orinoco River. Exxon Mobil Corp. and Royal Dutch/Shell Group are also active.

In the wake of the strike, Mr. Chavez vowed to create a “patriotic” PdVSA that “belongs to the Venezuelan people.” But the president’s bluster is tempered with practicality; he needs outside help to keep exports flowing out and dollars flowing in. In fact, his trip to the United Nations this month will include a stop in Houston to meet with U.S. oil executives.

Oil revenue is more important than ever for Mr. Chavez. After surviving a coup attempt in April 2002 and the strike eight months later, he is relying on government spending to boost his popularity and defeat a possible recall election. The ranks of Chavez opponents, who label him an authoritarian, have swelled as the economy has contracted. Polls indicate that two-thirds of eligible Venezuelans would vote to oust Mr. Chavez in a constitutionally sanctioned recall vote that could come as early as December.

“His prime interest is remaining in power, and that leads to a very pragmatic form of nationalism,” says David Hobbs, the London-based director of exploration and production strategy for Cambridge Energy Research Associates.

Venezuela wants to attract more foreign investment, especially in the exploration and development of offshore natural gas, but only on its own terms, says Fadi Kabboul, energy counselor at the Venezuelan Embassy in Washington. “There’s no question that we’re looking for someone to help, but Venezuela is not desperate,” he says. “These are strategic decisions.”

 My comment on this and what I have been reporting on the country’s reduced oil production: Separately the IEA (International Energy Agency) reported this week that Venezuela was producing 2.25 million barrels of oil a day, close to one million barrels of oil a day less than what the Government has been claiming and consistent with what has been reported here. The discrepancy is quite clear if one compares the Central bank’s report for the second quarter 2003 with the second quarter 2002. In 2Q 2003, the average oil price for the Venezuelan basket was close to US$ 26 compared to US$22 in the same quarter. But in the same quarter 2003 Government oil exports in US$ were down 25% for the same period, but the Government claims it is exporting an equal amount of oil! Similarly, OPEC’s web site says that in July Venezuela produced 2.5 million barrels of oil a day……

Sorry for not posting much this week, I have had a  mild cold that has nevertheless drained a lot of energy and limited my time and capacity to contribute, but beware, I am back!

Article by Marc Lifsher in the Wall Street Journal about the increasing dependence of Venezuela on foreign oil firms in contrast with Chavez’ claim that he was making PDVSA The people’ company” Since it is by subscription here is the full article:

CARACAS, Venezuela — This country’s leftist president, Hugo Chavez, likes to talk about turning the state oil monopoly into a “people’s company.” But in reality, Venezuela is becoming increasingly dependent on foreign companies to boost lagging production.

An anti-Chavez strike at the state oil company in December and January led to the dismissal of 18,000 workers. Critics charge that it also stripped Petroleos de Venezuela SA, or PdVSA, of the expertise and financial wherewithal to maintain natural-gas and oil fields and explore new ones. Venezuela‘s oil output, which was about 3.2 million barrels a day before the strike, is now 3.3 million barrels, PdVSA officials claim. But international oil experts peg output much lower, at 2.5 million to 2.8 million barrels a day.

Meanwhile, they figure crude-oil production by foreign companies has soared to between 800,000 and one million barrels a day compared with 360,000 barrels when Mr. Chavez became president in 1999. Although PdVSA’s petroleum activity contracted year-on-year 7% in this year’s second quarter, private-sector activity jumped 46%, according to Venezuela‘s central bank.

“PdVSA has been weakened to such a level now that it has to rely on the private sector to maintain or increase production,” says David Voght, a Caracas-based consultant with IPD Latin America. Officials at the Ministry of Mining and Energy, which speaks for PdVSA on policy issues, didn’t respond to repeated requests for comment.

Venezuela nationalized its oil industry in 1976, effectively closing it to foreign companies. However, in the mid-1990s, Caracas began allowing limited foreign investment for revitalizing older fields and developing new technology to tap deposits of tar-like heavy oil. While Mr. Chavez honored those contracts, he signed legislation in 2001 that was seen as a disincentive to investment because it greatly increased royalties on crude oil. At the same time, he approved a bill that opened natural-gas business to foreigners.

While interest in new crude-oil ventures has been tempered by the higher royalties, an increasing number of foreign firms are testing the waters as Venezuela opens a second round of competition for offshore natural-gas leases. Thirteen companies, including such distant actors as Russia‘s OAO Lukoil, bought data packages.

ConocoPhillips has been particularly aggressive in Venezuela. The Houston-based firm is operating two heavy-oil projects, developing a large oil-and-gas field near Trinidad and exploring for natural gas, along with ChevronTexaco Corp., near the mouth of the Orinoco River. Exxon Mobil Corp. and Royal Dutch/Shell Group are also active.

In the wake of the strike, Mr. Chavez vowed to create a “patriotic” PdVSA that “belongs to the Venezuelan people.” But the president’s bluster is tempered with practicality; he needs outside help to keep exports flowing out and dollars flowing in. In fact, his trip to the United Nations this month will include a stop in Houston to meet with U.S. oil executives.

Oil revenue is more important than ever for Mr. Chavez. After surviving a coup attempt in April 2002 and the strike eight months later, he is relying on government spending to boost his popularity and defeat a possible recall election. The ranks of Chavez opponents, who label him an authoritarian, have swelled as the economy has contracted. Polls indicate that two-thirds of eligible Venezuelans would vote to oust Mr. Chavez in a constitutionally sanctioned recall vote that could come as early as December.

“His prime interest is remaining in power, and that leads to a very pragmatic form of nationalism,” says David Hobbs, the London-based director of exploration and production strategy for Cambridge Energy Research Associates.

Venezuela wants to attract more foreign investment, especially in the exploration and development of offshore natural gas, but only on its own terms, says Fadi Kabboul, energy counselor at the Venezuelan Embassy in Washington. “There’s no question that we’re looking for someone to help, but Venezuela is not desperate,” he says. “These are strategic decisions.”

 My comment on this and what I have been reporting on the country’s reduced oil production: Separately the IEA (International Energy Agency) reported this week that Venezuela was producing 2.25 million barrels of oil a day, close to one million barrels of oil a day less than what the Government has been claiming and consistent with what has been reported here. The discrepancy is quite clear if one compares the Central bank’s report for the second quarter 2003 with the second quarter 2002. In 2Q 2003, the average oil price for the Venezuelan basket was close to US$ 26 compared to US$22 in the same quarter. But in the same quarter 2003 Government oil exports in US$ were down 25% for the same period, but the Government claims it is exporting an equal amount of oil! Similarly, OPEC’s web site says that in July Venezuela produced 2.5 million barrels of oil a day……

Good article in the Miami Herald (sent by Russell) on how the Chavez Government discriminates against those that oppose the Government, most of the stories are not new and they are truly sad, when a Government discriminates against its won people on the basis of political beliefs. Even more remarkable is the bit about the People’s Ombudsman firing those that are not pro-Chavez. What really irked me in the story was MVR Deputy Luis Tascon saying that discrimination is insignificant; he knows that PDVSA has sent letters to all its contractors and providers telling them they can not hire any of the 18,000 people fired by PDVSA. Now, imagine that, 18,000 people can not work for any oil or oil service company in a country where the Government controls that industry. What else can they do? Somewhere in this blog is the link to a copy of the letter sent by PDVSA Western Manager to all service companies telling they could not hire any fired workers. I know that people with Ph.D.’s who worked in PDVSA can not find jobs at Government research institutes because they are branded as traitors. Thus this Government acts like all those fascists Governments one reads about in history books but thinks it can not happen again as issues as basic and human rights are better ingrained in the world. Well, let me tell you they are not, the same people that claim a few signatures in the recall petition are bad ignore thousands of Venezuelans and their families that are being discriminated against. Moreover, many of these same people are choosing to leave the country to be able to support their families. Many of them have advanced degrees that cost the country a lot of money to obtain. Even worse, they have experience in fields which are not only critical to the country’s oil industry, but in which it is quite difficult to find qualified people. But as it has been usually the case with anything that has to do with knowledge, ability and competence, those are values despised by this perverse Government.

 I still can’t believe that the Government and PDVSA have decided to do away with the Orimulsion project. For those that don’t know, Orimulsion was a fuel oil substitute developed in Venezuela using heavy crudes (70%) suspended in water (30%) in the form of an emulsion. For years PDVSA and its research and development center worked on this project until they made it into a real commercial project. Power pants in the US, China, Korea the UK, Italy and other countries began importing this cheaper product to generate electricity. For Venezuela Orimulsion had a number of advantages, first, it allowed the country to export the cheaper heavy crudes, the process is fairly economical and the product is not covered by the country’s OPEC quotas. PDVSA even created a company called Bitor to commercialize the product which had been quiet successful despite charges that it was quite dirty as a burning fuel. In fact, I consider Orimulsion to be the most important contribution by Venezuelan Science and Technology to the economy.

Given this preamble, I was quite shocked to learn that the Chavez administration had decided to ditch the Orimulsion project reportedly because it is intensive in knowledge and technical expertise and those that have that are part of the people fired from PDVSA. While some reports say that only new projects will be cancelled, the Italian Ambassador to Venezuela visited the Vice-President today to express his dismay on his country not receiving any more Orimulsion. Thus, once again, the Chavze administration puts politics above everything else, simply canceling a project that would add to economic activity and would bring foreign reserves to the country and profits to PDVSA. According to former PDVSA executives, just the fact that Canada’s New Brunswick Power will not initiate its Orimulsion project will cost the Republic US$ 750 million in 2004 alone. Reportedly PDVSA will replace Orimulsion by fuel oil. Orimulsion was designed to compete in costs with coal not with fuel oil and its margins are more attractive. As usual, there was confusion on the issue, while the Italian Ambassador expressed his concerns to the Vice-President, PDVSA’ General Manger told Globovision that the current contracts would be fulfilled. Venezuela is the only country in the world which produces Orimulsion.