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Who are the real gangsters in the OPIC-PDVSA case?

By Gustavo Coronel reprinted from Petroleum World

OPIC has just released a decision on a claim by INTESA, a company jointly owned by SAIC and PDVSA to manage the computing sector of the Venezuelan petroleum industry. In this decision OPIC concludes that the Venezuelan government has illegally expropriated INTESA and that its foreign shareholders (SAIC) are entitled to compensation for this expropriation.

The document is detailed and its findings can only be summarized here, together with the comments made by the President of the Venezuelan petroleum company, Petrňleos de Venezuela, Ali Rodriguez, and by the Venezuelan Ambassador to the US, Bernardo Alvarez.

Ali Rodriguez says that the decision by OPIC is “political” and lacks legal merits. According to him SAIC simply found political support in the US and went to OPIC to ask for an unfair compensation. He admits that OPIC tried to settle the dispute amicably but that “PDVSA refused since they are not allowed to dispose of national funds without a legal basis”. Ambassador Alvarez added that SAIC is a company “politically very powerful and secretive, used to operate through political backdoors” and suggested that both OPIC and SAIC should be investigated. In short, Alvarez defined these two organizations as gangster-like operators.

On the other hand the document of OPIC is so severe that the word gangster would seem to apply more to the Venezuelan government than to SAIC. The main conclusions of OPIC are:

1. The Venezuelan government has expropriated INTESA in an illegal manner, according to the contractual definition of this term.

2. The indemnification requested by INTESA is pertinent, and,

3. INTESA has fulfilled all its obligations with OPIC.

As a result, INTESA is entitled to a full indemnification, the amount of which will be established in a different document.

In order for OPIC to reach this decision it had to analyze the videos, documents, quotes from Venezuelan government officers and INTESA representatives, as submitted by this company. Some of the components of the decision, as listed in the document of OPIC, are:

1. The expropriation was ordered by the Venezuelan President, Hugo Chavez, in December 2002. At that moment Chavez ordered that the remote control access capability of INTESA be discontinued, while the company was still asked to fulfill its obligations. I guess this amounts to removing the tires from a car while asking the driver to keep going.

2. Chavez announced by TV and radio that INTESA was being “nationalized” because it was an arm of the CIA. He described the move as “nationalizing the brain of PDVSA”.

3. The offices of INTESA were taken over by the National Guard. The employees of INTESA were harassed by the armed guards and were refused access to their work stations.

4. In parallel, a tax claim for US$40 million against INTESA was introduced by the government. Documents which could have served to refute this claim were kept in an office to which INTESA had no longer access.

5. The take over of INTESA is discriminatory because it was based on unproven accusations made by the government of Venezuela against the government of the US in connection with the promotion of a “plot” against the Venezuelan government. It was arbitrary because it was based on the use of armed force which prevented INTESA staff from doing their jobs while, at the time, they were being required by the Venezuelan government to do so.

6. The expropriation has not been the object of fair compensation. According to OPIC the two main Venezuelan government agents responsible for this illegal act are President Hugo Chavez and PDVSA`s President Ali Rodriguez.

The first person gave the orders and the second person executed them. From the document it appears that the actions against INTESA employees, who had been originally PDVSA`s employees contributed significantly to the general protest of the oil managers and technical staff against the government of Hugo Chavez.

This document by OPIC is an important contribution to the history of the Venezuelan petroleum tragedy which has been taking place under the government of Chavez. This man speaks of the former oil employees he dismissed over national television as traitors, criminals and saboteurs. He claims they have caused great damage to the industry and to the country. Documents such as OPIC`s, however, cast a different light in the tragedy suggesting that the traitors, criminals ad saboteurs are probably on the other side of the fence. The confession made by Hugo Chavez before the National Assembly, in February 2004, to the effect that he had consciously promoted and provoked the crisis in the petroleum industry, in order to take its political control, combine with documents such as the one summarized here to indicate very strongly who the real gangsters are.

Real patriotism involves the search for justice and truth. It has to do with deeds and not with empty words. When Venezuela returns to being a democracy and a nation ruled by Law, the gangsters really responsible for the petroleum tragedy will be brought to justice.

*Gustavo Coronel is a 28 years oil industry veteran, a member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), author of several books. At the present Coronel colaborates as the opinion-editorial editor of Petroleumworld en Espańol. Petroleumworld not necessarily share these views.

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