Venezuela starts campaign to mend oil ties with US

www.planetark.org USA: March 21, 2003

WASHINGTON - Amid heightened tensions in the Middle East, Venezuela is quietly launching a campaign to rebuild its shattered prestige as a reliable supplier of oil to the United States.

The effort will be spearheaded by an energy task force that will operate from the Venezuelan embassy in Washington. Its mission is to maintain regular contact with top Bush administration energy officials and key members of Congress and the oil industry. "We have put forth a plan of action over the next two or three months," Ambassador Bernardo Alvarez told Reuters in an interview late on Tuesday. "And we are going to contact all levels of American society.

"We have seen the need to deepen the strategic relationship between the United States and Venezuela."

The effort reflects a new approach to bilateral relations by Hugo Chavez, Venezuela's controversial president and a fiery populist who in the past has repeatedly clashed with Washington on issues that range from free trade to Cuba.

Traditionally, energy ties between the two countries have been tight.

Venezuela supplied more than 13 percent of U.S. oil imports until a two-month strike at state-run oil giant PDVSA ground shipments to a halt in December and January. Venezuela is also a key supplier of refined products as tough U.S. environmental laws discourage building new plants.

Many think Chavez' energy overtures will be well received in the Bush administration, given U.S. preparations for war against Iraq and the potential for disruptions in oil shipments from the Middle East.

"Clearly Venezuelan oil is very important to the United States and clearly an effort by Chavez to satisfy the U.S. on this front is a positive sign and will be taken that way," said Peter Hakim of the Inter-American Dialogue, a Washington think tank.

OIL TASK FORCE

Senior officials from both PDVSA and Citgo, PDVSA's U.S. gasoline retailer, will be permanently based in Washington to staff the new task force, as will specialists from Venezuela's ministry of energy and mines, Alvarez said.

"Three institutions are taking part, and the embassy here will coordinate everything," he said.

A similar task force existed until 2001, but it broke up as relations between the two nations deteriorated.

But as PDVSA gets its crude production back up to pre-strike levels, the task force will face the crucial task of convincing the United States that Venezuela means business.

Venezuela is also dispatching PDVSA's production and refining chiefs to Washington to explain Chavez' plans for the company.

The government earlier this year sacked 16,000 workers who took part in the strike and wants to downsize the company to make it more efficient. The opposition accuses Chavez of carrying out a witch hunt against opponents in the oil firm.

The task force will also tout what Ambassador Alvarez calls "the need for a more profound strategic alliance between Venezuela and the United States."

Venezuela wants U.S. firms to invest more to expand refining capacity in Venezuela to make up for an expected five million barrel-per-day refining shortfall in the United States in five years, the diplomat said. Likewise, the United States will need 38 trillion cubic feet of natural gas by 2015, up from 23 trillion now, and Venezuela has enough reserves to fill the gap, provided U.S. firms are willing to develop in natural gas fields there.

OIL AS STATE POLICY

Venezuelan officials will fan out in roadshows to carry the message to New York, Dallas, Houston and other energy centers in the United States.

Above all, they will try to convince U.S. officials that oil is a matter of "state policy" and not "an instrument to be used by the right or the left," Alvarez said.

Story by Pablo Bachelet