Chavez also announced Sunday that he had forced the retirement of 12 other employees at Petroleos de Venezuela, or PDVSA, and warned there would be more firings if the monthlong protest continued.
But rebellious workers - who are upset by recent government appointments to top company posts they say were political - ignored his threats, staging a rowdy protest at the company's Caracas headquarters.
Unionized workers and business leaders plan to support PDVSA dissidents with a 24-hour nationwide strike Tuesday. It will be the second time since Chavez took office that unions and business leaders join forces to strike.
The conflict has handed Chavez one of the biggest challenges of his three-year-old presidency. Oil accounts for a third of the South American nation's gross domestic product and 80 percent of its exports. Venezuela's crude reserves are the largest outside the Middle East.
The five-week labor slowdown has forced operators to scale back production at the Paraguana refinery complex, which produces 70 percent of Venezuela's refined products, according to company sources who have spoken on condition of anonymity.
The refinery was producing at about 50 percent of capacity Monday as loading for six vessels came to a halt, company sources told Dow Jones Newswires on condition of anonymity. Operators had decreased production over the weekend to prevent an accident as labor unrest slowed the flow of gasoline and oil.
Chavez, however, insisted that operations were normal in most of the industry. He vowed not to cave in to PDVSA's "elite," whom he accused of trying to preserve corporate privileges by "sabotaging" the oil industry.
Chavez angered longtime PDVSA executives by naming five of his own political allies to the board of directors and leftist Gaston Parra as company president. Chavez insisted Sunday that he needs political loyalists to trim corporate spending and increase PDVSA contributions to government coffers - a goal he considers key to his promises to combat poverty and corruption.
PDVSA "has always been managed by a political elite," Chavez said during his weekly radio address. "The plan is to return the oil industry to Venezuelans."
In a separate news conference Sunday, Parra said the board of directors will ensure PDVSA complies with Venezuela's policy of strict adherence to production quotas set by the Organization of Petroleum Exporting Countries. Parra accused longtime employees of resisting the policy, which he said has been proven successful by a recent rise in international oil prices.
Fired executives included Juan Fernandez, Horacio Medina, Eddy Ramirez, Gonzalo Feijoo, Alfredo Gomez, Carmen Elisa Hernandez and Edgar Quijano. Chavez did not announce replacements but said he had a long list of qualified professionals who were willing to take the jobs.
Last week, thousands of PDVSA workers stayed home, closed gates to facilities and slowed gasoline and tanker deliveries. On Sunday, they answered Chavez's threats by banging pots and pans and chanting "not one step backward" at PDVSA's Caracas offices.
At least a dozen vessels were waiting for operations to resume at two of five main export terminals for crude oil and refined products - El Palito in central Venezuela and Puerto La Cruz in the east.
Created in 1976 and admired for its efficiency in a nation riddled with corruption, the multinational Petroleos de Venezuela has grown to become one of the United States' largest suppliers of oil. [End]
Employees of Petroleos de Venezuela, or PDVSA protest outside of an executive office in Caracas, Venezuela, Monday, April 8, 2002. Venezuelan President Hugo Chavez dismissed seven dissident oil executives, moving to crush a revolt against the leadership of Venezuela's state oil monopoly that threatened the production of one of the United States' top crude suppliers. (AP Photo/Fernando Llano)