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Venezuela Energy Minister states oil workers won't accept Chavez defeat

By Pascal Fletcher Reuters

CARACAS, Venezuela (Reuters) - President Hugo Chavez's left-wing government said on Friday Venezuela's people, including oil workers, would not accept his defeat in Sunday's referendum on his rule.

The warning by Energy Minister Rafael Ramirez stoked fears that fanatical Chavez supporters, including state oil company employees and military commanders, could resist if the opposition prevailed in the poll on whether to recall the populist president.

"There is no way he (Chavez) will be beaten. There is no way the people would accept it, including our oil workers," Ramirez told reporters.

Chavez and the armed forces have pledged to respect the referendum result, whatever it is, when announced by electoral authorities, possibly late on Sunday,

But the president Thursday also warned of a popular backlash if the opposition coalition recalled him and came to power in subsequent elections.

The warnings revived the worst-case referendum scenario for the world's No. 5 oil exporter: a contested outcome triggering renewed turmoil like that of 2002 and 2003, triggered by a failed coup against Chavez and a crippling oil strike.

Chavez, a former paratrooper who six years before winning the 1998 elections tried to seize power in a coup of his own, has purged the military and state oil firm PDVSA, converting them into bulwarks of his self-styled "revolution."

Breezily predicting his "inevitable" referendum win, the president on Thursday dismissed the opposition as incapable of ruling and said soldiers and oil workers would not accept a government of his enemies. It would be "swept away," he said.

Sunday's referendum pits the firebrand nationalist hailed by followers as a champion of the poor against opponents who say he is a domineering strongman who has divided the nation.

The run-up to the referendum has been peaceful. Chavez supporters and opponents held big street rallies in Caracas on Thursday.

OIL RISK

Jittery oil markets already spooked by events in Iraq and Russia are nervous about the referendum. Oil futures prices hit record highs over $46 a barrel on Friday due to a U.S. refinery fire and fears of supply disruptions.

Ramirez made no attempt to dispel such fears. "If Venezuela enters a period of instability, well, I don't see prices having any limit," he said.

He said the only guarantee of stability was Chavez.

To the delight of the Venezuelan leader, many Wall Street analysts have made clear they would prefer a clear Chavez win to a contested result.

"The risk is there," said Jose Cerritelli, analyst with Bear Stearns in New York. "If Chavez loses, you have a risk of hard-core 'Chavistas', perhaps a faction of the military, trying to defend themselves against a perceived witchhunt."

The opposition, which groups political parties, business and union leaders and military dissidents, say there will be no witchhunt against Chavez supporters if they win power.

To recall Chavez, the opposition must equal or beat the 3.76 million votes he received when reelected in 2000. But if the "No" vote is bigger, he stays in office.

If Chavez loses, a presidential election will be held within 30 days. The Supreme Court still has to rule on whether he could stand in that poll. If not, he would have to wait until elections in December 2006.

"Chavez's Plan B is almost as good as his Plan A. If he wins (the referendum), great. But if he loses, he doesn't plan to go away," Cerritelli said.

Editor's note: so who has a fouler impact on oil prices, Venezuela's opposition that controls nothing or Hugo Chavez whose institutional grip and ominous control of PDVSA threatens to disrupt output?



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