Venezuela has more oil than all the Arab nations combined

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Greg Palast, 4/3/6 at his website at  Published are articles on oil and the war at oil plans for Iraq war, oil contributions to party politics, more on Iraq war, and a series of articles on the World Bank


Greg is an award wining investigative reporter from LA who several years ago headed to the freer British Isles where he is a staff reporter for the Manchester Guardian.  He has authored several top selling books including the Best Democracy Money Can Buy.


Oil Reserves Venezuela



If you thought high oil
                                    prices were just a blip 
think again. In an exclusive
                                    interview with Greg 
Palast for BBC Newsnight the Venezuelan President 
Hugo Chavez has ruled out any return to the era of 
cheap oil. 
The colourful Venezuelan leader hosts the OPEC meeting 
on June 1 in Caracas and he will ask OPEC to set $50 
a barrel - the average price last year - as the 
long term level. During the
                                    1990s the price of 
oil had hovered around the $20 mark falling as 
low as $10 a barrel in early 1999. Chavez told 
Newsnight "we're trying to find
                                    an equilibrium. 
The price of oil could remain at the low level 
of $50. That's a fair price it's not a high 
price". Hugo Chavez will have
                                    added clout at 
this OPEC meeting. 
US Department of Energy analyses seen by Newsnight 
show that at $50 a barrel Venezuela - not Saudi 
Arabia - will have the biggest oil reserves in 
OPEC. Venezuela has vast deposits of extra heavy 
oil in the Orinoco. Traditionally these have not 
been counted because at $20 a barrel they were 
too expensive to exploit - but
                                    at $50 a barrel 
melting them into liquid petroleum becomes extremely 
profitable.  The US DoE report shows that at 
today's prices Venezuela's oil reserves are bigger 
than those of the entire Middle East including 
Saudi Arabia, the Gulf states, Iran and Iraq. 
The US DoE also identifies Canada as another future 
oil superpower. Venezuela's deposits alone could extend 
the oil age for another 100
The US DoE estimates that Chavez controls 1.3 
trillion barrels of oil - more
                                    than the entire 
declared oil reserves of the rest of the planet. 
Hugo Chavez told Newsnight's Greg Palast that 
"Venezuela has the largest oil reserves in the 
world. In the future Venezuela won't have any 
more oil - but that's in the
                                    22nd century. 
Venezuela has oil for 200 years." Chavez
ask the OPEC meeting in June to formally accept 
that Venezuela's reserves are now bigger than 
Saudi Arabia's. Chavez's increased muscle
not go down well in Washington. In 2002 the 
Bush administration welcomed
                                    an attempted coup 
against Chavez. He told Newsnight that the Americans 
had organised it in an attempt to get hold of 
Venezuela's oil. Ironically by invading Iraq
George Bush has boosted oil prices and effectively 
transferred billions of dollars from American 
consumers to Chavez. Up to $200
                                    million a 
day - half of it from the US - is flooding 
into Caracas. Chavez is spending this on building 
infrastructure and increasing the minimum wage and 
improving health and education
                                    in the poor ranchos 
which surround the cities. As a result even his 
opponents accept that Chavez is extremely popular 
and will easily win the next
                                    Presidential election 
in December. 
havez is also spending billions in the rest of Latin
America - exchanging contracts for oil tankers 
and infrastructure projects and buying up loans 
in Argentina and Brazil. He has made cheap oil 
deals with Ecuador and the Caribbean. He has 
also spent some of the dollars which have come 
in from the US supporting Fidel Castro in Cuba. 
In return Cuba has supplied the thousands of doctors 
and teachers who are transforming conditions in 
the barrios of Caracas. Washington accuses Chavez 
of buying influence in Latin America. 
The Newsnight team had to endure
                                    the long speeches 
and marathon six hour TV shows
                                    which Hugo Chavez 
delights in. Chavez posed for Newsnight posing with 
the sword of Simon Bolivar the 18th century liberator 
who drove out Spanish imperialists
                                    from South 
America. The symbolism was clear but behind the 
showman is a clever political brain. 
Chavez has not invaded any foreign
He does not have secret prisons
                                    at home or 
abroad. Chavez has repeatedly won democratic 
elections and the pposition operates freely 
although some members have been
                                    charged with 
accepting illegal foreign donations. Nonetheless 
George Bush's administration repeatedly targets 
Chavez on human rights and finances
                                    his opponents. 
Earlier this year US Defense Secretary Donald Rumsfeld
compared Chavez to Hitler--because
                                    he was elected 
democratically.  Last
                                    year the influential 
American evangelist Pat Robertson called for 
his assassination. Robertson later apologized 
and said that he did not "necessarily"
                                    have to 
be killed so long as he was kidnapped by American 
Chavez told Newsnight that he
                                    was still concerned 
that George Bush had not learnt
                                    the lessons of Iraq 
and would order an invasion to try to secure 
Venezuela's oil. "I pray this will not happen 
because US soldiers will bite the dust and so 
will we, Venezuelans". He warned that any such 
attempt would lead to a prolonged
                                    guerilla war 
and an end to oil production. "The US people 
should know there will be no oil for anyone".  
Chavez does not accept Tony Blair's criticism 
of him for lining up with Fidel
                                    Castro. He told 
Newsnight "if someone is sleeping together it is 
Bush and Blair. They share the same bed." 
Chávez seeks to peg
                                    oil at $50 a barrel

Mark Milner
Monday April 3, 2006
The Guardian


Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.  A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.

"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."  The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.

According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.  A $50-a-barrel lock-in would open the way for Venezuela, already the world's fifth-largest oil exporter, to demand a huge increase in its official oil reserves - allowing it to demand a big increase in its production allowance within Opec.

Venezuela's oil minister Raphael Ramirez told Newsnight in a separate interview that his country plans to ask Opec to formally recognise the uprating of its reserves to 312bn barrels (compared to Saudi Arabia's 262bn) when Mr Chávez hosts a gathering of Opec delegates in Caracas next month.  Venezuela's ambitious strategy to boost its standing in the global pecking order of oil producers by increasing the extent of its officially recognised reserves is likely to face opposition. Some countries will oppose the idea of a fixed price for the global oil market at well below existing levels. Others are unlikely to be happy with any diminution of their influence over world oil prices in favour of Venezuela.  Caracas's hopes for an increase in its standing would be a far cry from the days when Mr Chávez came to power after years of quota-busting during which Venezuela helped to keep oil prices down. "Seven years ago Venezuela was a US oil colony," said Mr Chávez.

As he seeks to bolster his country's standing on the world stage, the Venezuelan president has also introduced radical changes to the domestic oil industry. Last Friday his government announced that 17 oil companies had agreed to changes which will see 32 operating agreements become 30 joint ventures that will give the government greater say over the country's oil industry.  The original deals were signed in the 1990s as part of a drive to attract more investment into the country's oil industry. However Mr Chávez said the deals gave foreign companies too much and the government too little. Under the new arrangements state-run Petroleos de Venezuela will hold 60% of the joint ventures. "Now we are associates and this commits us to much more ... it's no longer a contract for doing a service, it's a strategic alliance," Mr Chávez told the companies that signed up.

The new arrangements were not universally welcomed by the oil companies. Exxon Mobil and the Italian energy company Eni have refused to sign up to the new arrangements.

Mr Chávez, a former paratrooper who has survived several attempts to oust him and who faces re-election in December, regards Venezuela's oil revenues as crucial to his plans to fight poverty. Critics accuse him of squandering the country's oil wealth on improvised social programmes.   The Venezuelan president used the Newsnight interview to attack the role of the International Monetary Fund in Latin America, where it has a reputation for pushing market-based reforms as the price of its help to countries struggling with their finances.

The Chávez government has helped a number of countries, including buying Argentinian and Ecuadorean bonds, with Mr Chávez arguing that he would like to see the IMF replaced by an International Humanitarian Fund.


Hugo Chávez was born in 1954. The former paratroop colonel first came to prominence after a failed coup in 1992, for which he was jailed for two years. He was elected president of Venezuela in 1998, launching a social programme known as Bolivarianism, after the revolutionary Simón Bolívar, and reversing planned privatisations. In 2002 he survived a coup attempt and, two years later, a bid to unseat him in a referendum. He has close links with Cuba's Fidel Castro and has frequently clashed with the United States.



Read, "The Assassination of Hugo Chavez," in Greg Palast's

new book, "ARMED MADHOUSE: Dispatches from the Front Lines

of the Class War" to be released by Penguin Dutton June 6

(US) and July 7 (UK).

Pre-order it today or donate to Palast Investigative Fund
for a rsonally signed copy at: 
View Palast's investigative reports for Harper's Magazine 
and BBC Television's Newsnight
Special thanks to Matt Pascarella,
                           Leni von Eckardt, and 
Richard Rowley for their research and production assistance 
on this report.
Price could see Venezuela producing for 200 years
Country's reserves may exceed Saudi Arabia's

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