We need to follow Reagan's example and cut off terrorists' life blood - oil revenue. One thing this report painstakingly avoids to report is Citgo is owned by Venezuela.
Worldwide OperationsCITGO Petroleum Corporation is a manufacturer, marketer and transporter of gasoline, jet turbine fuel, diesel fuel, heating oils, lubricants, refined waxes, petrochemicals, asphalt, and other petroleum based industrial products. Headquartered in Tulsa, Oklahoma, the Company is owned by PDV America, Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela S.A., (PDVSA).
Thousands protest against Venezuelan President Hugo Chavez in Caracas, January 6, 2003. Thousands of foes of Chavez took to the streets again after the leftist leader threatened to punish striking opponents who have crippled the vital oil industry and who vow to resist a government crackdown. Photo by Kimberly White/Reuters
Venezuela plans to cut oil company into 2 parts - [Full Text] CARACAS, Venezuela -- Energy Minister Rafael Ramirez said Monday the government planned to take the state-owned oil company, the world's fifth-largest, and break it in two, hoping also to snap the back of a devastating six-week strike aimed at driving President Hugo Chavez from power.
Ramirez, who offered preliminary details of the plan in an interview, said the government intended a sweeping restructuring of Petroleos de Venezuela, or PDVSA. The company controls the largest oil fields outside the Middle East and is an important supplier to the United States.
He said the government would "decentralize" the company by dividing it into PDVSA East and PDVSA West, hollowing out the Caracas-based management and making the two entities "financially autonomous."
Such a move would effectively gut the company of middle- and upper-level executives who have joined a coalition of business and labor leaders in opposing Chavez, whose left-leaning policies they say are destroying the country.
Government opponents said that floating such a plan amounted to government bluster aimed at breaking the morale of what they estimated were 30,000 oil workers who have joined the strike.
Ramirez said the goal was to restore the company's production capacity of about 3.1 million barrels of crude oil a day while reducing "exorbitant bureaucratic costs," which he estimated at $1 billion.
He said the company produced about 14 million barrels last month and was currently turning out 800,000 barrels a day, a quarter of what output was before the strike.
Outside analysts expressed doubts that the company was even producing that much oil, and they were immediately skeptical that the plan could revive production to pre-strike levels.
Ramon Espinasa, an ex-PDVSA economist who now works as a consultant to the Inter-American Development Bank, said such a plan could have a devastating impact on what was once considered a model among state-run oil companies, and the breakup could have an equally devastating impact on Venezuela's oil-dependent economy.
It could also reverberate through world markets and in the United States, which imports about 14 percent of its oil from Venezuela.
"We could talk about the need to diversify the economy, but those are long-term goals," Espinasa said. "But right now, Venezuela's economy needs oil. If not, the country could collapse."
The plan, analysts said, appeared to be far less an economic strategy than a political one, aimed at purging the company once and for all of Chavez opponents and wresting more political control over the industry in Venezuela, even if it means enduring sharp declines in production.
Moises Naim, a former Venezuelan minister of trade and industry, drew comparisons between what is happening in Venezuela and what happened in Iran after the Islamic Revolution in 1979.
Iran's oil production, which rivaled Saudi Arabia's, plummeted from 6 million barrels a day to less than 2 million. In the decades since, Iran's oil output has been about half the pre-revolution levels -- about 3 million barrels a day. But, Naim said, the Iranian government has tighter political control of the industry.
"He may may be willing to live with a smaller oil industry, and a less competitive oil industry, as long as he has more control over it," Naim said, referring to Chavez. "What we know is that Chavez intends to stay in power at any cost."
In a televised speech Sunday night, Chavez said he had assumed the rank of "oil commander" and promised to rebuild the state company into "a new PDVSA, a patriotic PDVSA." [End]
Oil power to the people is priority for Rodríguez*** A long-time friend of Cuba's Fidel Castro, Mr Rodríguez likens the tightening economic noose that is the oil strike with the long-time US-imposed trade embargo on the Caribbean island.***