U.S. Prepares "Friends of Venezuela" Initiative, Fears Oil Shortage

Striking oil workers of Petroleos de Venezuela protest in Caracas www.forbes.com

WASHINGTON, January 10 (IslamOnline & News Agencies) - The Bush administration is preparing a major initiative in the Venezuelan crisis due to its increasing concerns about an oil shortage as a possible war with Iraq approaches.

The U.S. initiative is centered on the formation of a group of "Friends of Venezuela," trusted by one or both sides to the conflict, which would develop and guarantee a compromise proposal, based on early Venezuelan elections presented through an existing mediation effort by the Organization of American States, the Washington Post reported on Friday, January 10.

The U.S. hopes the initiative, expected to be announced "within the next week" will lead to a breakthrough in deadlocked talks between the government and opposition there, according to U.S. and foreign diplomatic sources, the Post said.

Venezuela stopped 1.5 million oil barrels sent daily to the U.S.

Venezuela has been wracked by 40 days of sometime violent strikes organized by labor and union leaders with the aim of forcing populist President Hugo Chavez out of office.

The strike has hit Venezuela's oil exports the hardest, with production dropping from around three million barrels before the strike to between 600,000 and 800,000 barrels a day now, according to the Chavez administration.

Venezuela has practically stopped all oil exports, including the 1.5 million barrels a day it regularly sent to the United States -- 15 percent of all U.S. oil imports.

"We were getting 1.5 million barrels of oil each day, and we're not getting it now," the senior State Department official said. Concerns have multiplied over the past week as Chavez moved to fire senior oil executives and restructure the state-owned oil enterprise, the official said.

It is the success of the oil strike that has prompted the United States to seek a role in the crisis, a foreign diplomat told the Post.

For Washington, the diplomat said, the situation in Venezuela moved "from a problem in an important country in Latin America to a very critical matter ... With the war in Iraq, it became a really strategic matter."

According to the sources, Brazil, Chile, Mexico, the United States, the United Nations and possibly Spain would develop and guarantee one or two possible formulas to solve the impasse in Venezuela: a constitutional amendment or a referendum.

Chavez refuses to resign and the Venezuelan constitution allows for a referendum on the president's continuance in office held half way through his term, in Chavez' case, in August. The opposition is pressing for one on February 2.

An unidentified senior U.S. State Department official told the Post that the United States could support either option, but wants something to be agreed to soon that would stop the strikes and street demonstrations.

The U.S. hope, sources said, is that both sides adhere to an agreement guaranteed by the new "group of friends."

Secretary of State Colin Powell, in an interview with the Post on Wednesday, January 8, said he was working on the Venezuelan crisis, but refused to provide details.

"We're just trying to put a little more oomph behind what (OAS Secretary General Cesar) Gaviria is doing," he said.

Powell has held discussions in the past few days with Mexican Foreign Minister Jorge Castaneda, as well as with Brazilian officials, Annan and OAS Secretary General Cesar Gaviria, who has been mediating talks in Caracas between the opposition and the Chavez government.

Those talks are stalled on the fundamental issue of whether, and how, Venezuelan President Hugo Chavez remains in power, AFP said.

Brazilian President Luis Inacio Lula da Silva has not yet agreed to the U.S. idea and is awaiting a meeting he has called for Wednesday, January 15, when regional leaders gather in Quito for the inauguration of the newly elected president of Ecuador.

Latin American sources said there is little desire to involve any government outside the hemisphere, except perhaps Spain.

At the same time, Latin American sources told the Washington Post, it is widely believed that any high-level intervention in the OAS effort that does not include the United States is unlikely to bring the opposition to agreement.