Hugo Chavez declares a new oil order

HUGO CHAVEZ: WE HAVE MORE OIL THAN SAUDI ARABIA
BBC Newsnight TV
April 3, 2006

In an exclusive interview with GREG PALAST, Hugo Chávez declares a new oil
order.

Venezuela officially demands OPEC recognize his nation's reserves as
largest.

Tonight, BBC Newsnight will kick off its Latin America Week Special with
Palast's exclusive report from Venezuela.

You can watch the BBC Newsnight Report live at 5.30 pm EST at Newsnight's website:
http://news.bbc.co.uk/1/hi/programmes/newsnight/default.stm
(The report will remain viewable for 24 hours).


NO MORE CHEAP OIL SAYS CHAVEZ
BBC Newsnight
Monday April 3, 2006

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 years.

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 will ask the OPEC
meeting in June to formally accept that Venezuela's reserves are now bigger
than Saudi Arabia's.

Chavez's increased muscle will 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.

Chavez 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 countries. He does not have secret
prisons at home or abroad. Chavez has repeatedly won democratic elections
and the opposition 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 - and 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 special forces.

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."

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Also see The Guardian story about the report:
http://business.guardian.co.uk/story/0,,1745467,00.html