Venezuela's Chavez sacks oil execs

news.ft.com CARACAS, Venezuela (Reuters) - 24 Jan 2003 05.29

A defiant President Hugo Chavez has raised the stakes in Venezuela's bitter oil industry conflict by announcing 3,000 oil company executives were sacked and saying oil output was rising faster than expected.

Chavez's left-wing government has used troops and replacement crews to break a seven-week-old strike aimed at driving him from office. But he still faces huge problems restarting refineries and persuading foreign shippers to return to what was the world's fifth-largest oil exporter.

Anti-government oil workers conceded crude output was rising despite the long stoppage, saying it reached 25 percent of capacity at 812,000 barrels per day (bpd) on Thursday.

Opposition data lag government estimates, which peg production above 1 million bpd, but both figures show a steady recovery over the past fortnight.

"The oil wells are working and today we have already exceeded one million barrels per day in oil production and the recovery has been much faster that we hoped," Chavez said.

"The perspective we have is that by the end of January, within a week, or at the latest in the first week of February, we should be at roughly two million barrels per day of oil production," he told a huge government rally.

Oil used to provide more than half of Venezuelan state revenue, and the 53-day-old strike has caused an economic crisis in the OPEC member nation. Chavez announced a massive budget cut and suspended foreign exchange trading Wednesday.

"The anti-patriotic, privatising, neoliberal, fascist, coup-plotting, depraved oligarchy thought they would kick us out of power by the end of the year through the oil strike, or rather the oil sabotage, because there is no strike here," Chavez said, adding the strike had failed.

Strikers, who want to force Chavez to resign and hold early elections, claim 90 percent support for the strike among the country's 37,000 oil workers. They poured cold water on Chavez's output objectives.

"The government might get it up to 1.3 or even 1.5 million barrels per day, but alone they will never get back to the three million we had before," an opposition spokesman said.

Chavez blamed a spate of accidents, including oil spills and refinery fires, on sabotage by the strikers. In his speech on Thursday, the president said a total of 3,000 state oil firm managers and technicians had been fired -- 1,000 more dismissals since last week.

"They sabotaged the loading terminals, the distribution ports and the pipelines, but these have all been restored by the revolutionary government, the people and the Venezuelan Armed Forces," Chavez said.

The opposition said the government was neglecting crucial safety procedures in its rush to restore output, blaming the accidents on unqualified strike-breakers.

EXPORT STILL SLOW

Despite two weeks of higher flows at the wellhead, oil exports have been stuck around 500,000 bpd, a fifth of normal levels, according to shipping agents.

About 90 percent of the country's oil refining remains closed, according to opposition estimates, and foreign ship owners say insurance risks due to uncertified port staff and poor safety practices prevent them stopping in Venezuela.

Before the strike, Venezuela pumped 3.1 million bpd of crude oil and refined a third of the oil, supplying 13 percent of U.S. import needs.

The strike has helped drive world oil prices to two-year highs, and caused severe fuel shortages on the local market.

Some blue-collar oil workers have returned to work to avoid losing their jobs. But support for the strike remains strong among skilled workers at oilfields and refineries, and managerial staff in the company head offices.

Bladimiro Blanco, an anti-Chavez member of the Fedepetrol oil union, said 85 percent of his 20,000 membership, including blue collar PDVSA employees and contractors, stayed on strike on Thursday.

PDVSA chief Ali Rodriguez said last week that 75 percent of contract workers have returned to work, while half of the management was still out.

Earlier this week, oil tanker pilots in the western Lake Maracaibo oil hub went back to work after accepting a big pay packet from the government.

The move has eased port operations in the region which pumps half the country's crude oil, but export levels have not recovered partly because foreign ship owners have stayed away.

Pilots in the east of the country have been working normally since the beginning of January, but ship agents say very few tankers are leaving from these ports.

Strike leader Juan Fernandez said oil exports from the western Lake Maracaibo were increasingly dangerous because the government had failed to maintain dredging of the long channel linking export terminals to the Caribbean Sea.