Venezuela plans to tighten OPEC's grip over two-thirds of the world's oil reserves
<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, June 13, 2003 By: David Coleman
Forbes magazine reports from Doha in Qatar that "Venezuela blames America for backing a failed coup attempt last year, and some in the Pentagon question the US alliance with Saudi Arabia, linchpin of the Organization of the Petroleum Exporting Countries (OPEC) cartel."
Meanwhile OPEC has remained silent in the face of the threat to a growing number of its members, confining debate to the price of its oil ... until now.
Venezuela has put the issue of sovereignty back to the top of the agenda at a long-term strategy meeting. Venezuelan Energy & Mines Minister Rafael Ramirez told reporters "We need to emphasize the idea that the world has left behind the colonial era ... when one power could take by force the resources of another country ... there are several countries which could feel threatened."
The proposal is unlikely to lead to any immediate threat to world oil supplies ... but Venezuela's idea of tightening OPEC's grip over two-thirds of the world's oil reserves, and seeking to avoid military attack, has awakened interest from other members ... it's a serious concern that OPEC members with big oil reserves will become occupied by foreign powers.
While the United States is anxious to secure cheap supplies, it has increased its military and political influence in key members such as Saudi Arabia, Kuwait and recently Iraq. Under the leadership of Saudi Arabia, OPEC has traded revolutionary rhetoric for talk of partnership with consuming countries in the west and some cartel participants believe its now leaning too far Washington favor with the invasion of Iraq war as just one more bad omen.
"The United States can't continue to invent wars ... we want to have a deal with the world powers ... we will supply oil and gas, but you can't invade my country ... after Iraq, who is next?"
Venezuela's route is to link security of oil supply to OPEC nations' national security ... if approved, it would be raised at the next OPEC Heads of State summit in 2005. But a number of OPEC delegations believe that if OPEC does not rediscover its ideological roots ... born in Venezuela ... and assert national sovereignty over natural resources, OPEC could be wrecked by aggressive US foreign policies and the combined the financial clout of the world's top four oil companies.
Iran and Libya are welcoming the move ... they are already under unilateral US sanctions and have no time for Washington dictates, thumbing their nose at the Bush administration at every opportunity. They are, though, tethered by Saudi Arabia, which resolutely cuts political arguments from OPEC discussions in an attempt to make the group a more focused market manager.
Given the current neocolonialist climate in Washington, any attempt by OPEC to fend off United States attack could possibly add fuel to USA critics who see the OPEC cartel as an instrument of economic warfare ... Venezuelan OPEC officials believe that Venezuela's experience with foreign investment in the 1990s, and Washington's "hairy hand" involvement in the April 11, 2002 coup d'etat could be cloned with OPEC affiliates as the primary target for unilateral US intervention.
Venezuela's deputy oil minister Luis Vierma offered a presentation of facts to OPEC earlier this month and said "We have already said that Venezuela's experience could be repeated in other OPEC members with very negative results, destabilizing countries." As a result Venezuela has proposed that OPEC should reinforce its sovereign powers establishing a minimum royalty rate across the group ... a tax on gross production. Non-OPEC producers, however, prefer to taxes profit while Venezuela has increased its royalty rate to 30%.