If
Guaidó comes to power and privatizes PDVSA, U.S. oil companies —
with Chevron and Halliburton leading the pack — stand to make
record profits in the world’s most oil-rich nation, as they did in
Iraq following the privatization of its national oil industry after
U.S. intervention.
by
Whitney Webb
Part
2 - Profitable but not Rockefeller-profitable
Chevron’s
history in Venezuela is long and storied, as its presence in the
country dates back more than a century. Over that time, Chevron’s
presence in Venezuela has remained a constant despite the rule of
drastically different governments, from military dictatorships to the
socialist Chavista movement.
For much
of its history in Venezuela, Chevron has had to deal with the
Venezuelan government’s laws regarding oil production, particularly
a 1943 law that held that foreign companies could not make greater
profits from oil than they paid to the Venezuelan state. A few
decades later in the 1960s, foreign corporations were made to manage
their oil extraction projects in Venezuela by working closely with
the Venezuelan Oil corporation, which later gave way to the current
state oil company PDVSA, created in 1976. It was around this period
that Halliburton first began work in Venezuela.
However,
foreign corporations — particularly American ones — disliked
having to settle for minority stakes in PDVSA projects and longed for
the early days of Venezuela oil extraction when companies like
Rockefeller-owned Standard Oil made wild profits off their
Venezuelan oil assets.
After
the “apertura petrolera” (or “oil opening” to foreign
investment) in the early 1990s — and especially under the
U.S.-backed government of Rafael Caldera, the president who
immediately preceded Hugo Chávez — it seemed that the
privatization of PDVSA was soon to become a reality and companies
like Chevron, ExxonMobil and Halliburton enjoyed the “golden age”
of American oil interests in Venezuela. However, Caldera’s fall
from grace and the rise of Chavismo quickly shattered this
decades-long dream of U.S. corporations and politicians.
Not only
did Chávez end any possibility of PDVSA’s privatization, he also
weakened what remaining influence transnational oil companies had
over the state oil company. For instance, he appointed independent
oil experts to PDVSA’s board of directors, upending years of
precedent where PDVSA managers with close ties to international
companies had been responsible for controlling the board’s
membership.
Chávez
further restricted corporate ownership on some oil projects to 49
percent and fired PDVSA’s then-president, replacing him with a
political ally. These drastic changes, among others, led to a strike
among many long-time PDVSA workers, a strike that immediately
preceded the failed U.S.-backed coup attempt in April 2002.
Following
the coup, Chávez dismantled a joint venture originally
established in 1996 between PDVSA and the Venezuelan subsidiary of
the U.S.-based company SAIC, known as INTESA. INTESA, per the
agreement, had controlled all of PDVSA’s company data (and its
secrets), which it then fed to the U.S. government and U.S. oil
corporations until Chávez destroyed it. This is hardly surprising
given that the managers of SAIC at the time included two former U.S.
secretaries of defense and two former CIA directors. Though
obviously a smart move for Chávez, it weakened an advantage of U.S.
corporations who had inside information on PDVSA while INTESA was
operational.
The
tensions between the Chavista government and the U.S. government
along with U.S. corporations only grew from there before reaching a
crescendo in 2007. That year, Chávez announced a decree that
would nationalize the remaining oil extraction sites under foreign
company control, giving PDVSA a minimum 60 percent stake in all of
those ventures. U.S. oil companies ExxonMobil and ConocoPhillips left
their Venezuelan operations behind as a result, losing billions in
the process. The president of ExxonMobil at the time was Rex
Tillerson — who would later become President Donald Trump’s first
secretary of state.
Yet,
during this time, Chevron, unique among American oil companies, saw
an opportunity and spent the next several years cultivating close
ties to the Chavista government and Chávez himself. Through the
efforts of Chevron executive Ali Moshiri, Chevron blazed a new trail
that would later serve as a model for foreign oil companies seeking
to do business in Chavista-led Venezuela. Halliburton and another
U.S.-based oil services company, Schlumberger, also decided to
continue business in Venezuela.
During
this time, the Venezuelan government through PDVSA and Chevron
entered into several joint ventures, one of the most important of
which became known as Petropiar, which blends Venezuela’s heavy
crude oil with other substances to make it more easily transportable.
However, Chevron — due to Chávez’s reforms of the oil sector —
was forced to settle for minority stakes in all of these ventures.
Halliburton,
which has historically been a main operator for Chevron-owned oil
fields, again partnered with Chevron’s post-2007 ventures in
Venezuela and operates the Petropiar and Petroboscan oil fields that
both have minority Chevron ownership.
For
years, Chevron’s bet on Chavismo paid off and the profits rolled
in. Moshiri even appeared in public on several occasions with Chávez,
who once even called the Chevron executive “a dear friend.”
However, following Chávez’s death in 2013 and the beginning of the
U.S-backed economic siege of Venezuela soon after — first through
joint oil-price manipulation in cooperation with Saudi Arabia and
then through sanctions — the profits of PDVSA, and thus Chevron,
have fallen dramatically. During this time, Houston-based
Schlumberger drastically scaled back its operations in Venezuela.
Since
then, relations between the Maduro-led government and Chevron have
deteriorated precipitously and now, with the current U.S. coup in
motion, Chevron is poised to turn on the Chavista government with the
hopes that profits will not only improve but exceed what they were
during the heights of the Chevron-Chávez partnership.
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