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Venezuela: The spectre of Big Oil

FEBRUARY 21, 2008 – “Never again will they rob us – the ExxonMobil bandits. They are imperial, American bandits, white-collared thieves. They turn governments corrupt, they oust governments. They supported the invasion of Iraq.”[1] This was the response from Venezuelan president Hugo Chávez to the successful lawsuit by the world’s biggest corporation (ExxonMobil), freezing $12 billion in assets of Venezuela’s state-owned oil company, PDVSA – a serious escalation in Big Oil’s long running dispute with Chávez and the movement he represents.

ExxonMobil isn’t suing PDVSA because it needs the money. The world’s largest publicly traded corporation recorded profits of $40.6-billion (U.S.) in 2007, up three per cent from 2006’s record of $39.6-billion. “If Exxon were a country, its 2007 profit would exceed output of two-thirds of the world’s nations. Its 2007 revenue of $404-billion (U.S.) would place it among the 30 largest countries, ahead of such middle powers as Sweden and Venezuela.”[2]

ExxonMobil claims it is suing PDVSA because of a June 2007 deadline given by Chávez to Exxon and other Big Oil corporations operating in Venezuela, demanding they cede majority control in their heavy-crude upgrading projects in the country. ExxonMobil and ConocoPhillips filed arbitration requests with the International Center for Settlement of Investment Disputes, and ExxonMobil simultaneously took legal action in courts in the U.S. and Britain, which on February 7 agreed with their claim, and ordered the freeze of PDVSA assets.[3]

But there is much more at stake than a simple legal disagreement. First – many other Big Oil companies have agreed to Chávez’ terms and not gone to court – among them, Chevron Corp., Norway’s Statoil ASA, Britain’s BP PLC and France’s Total SA.[4] Second, Venezuela is not the only country to confront Big Oil and demand that old contracts be renegotiated. Here in Canada, Newfoundland’s Danny Williams demanded and won an ownership share in the multi-billion-dollar Hebron offshore oil deal.[5] Even the Tories in Alberta are forcing Big Oil to pay higher royalties.[6] And in Russia, “both BP PLC and Royal Dutch Shell PLC have ceded control in big, lucrative Siberian projects to Russian gas monopoly OAO Gazprom.”[7]

The truth is, ExxonMobil’s ultimatum has more to do with politics than economics. Russia’s ruler Vladimir Putin holds office because of his ties to the secret service, his crackdown on public debate, and his commitment to pushing Russia back into the world of Big Power politics. That world of corruption and repression is comforting and familiar to the owners of ExxonMobil. Chávez, by contrast, holds office because millions have again and again been willing to put their bodies on the line against multinational corporations and their local allies. That revolutionary movement is terrifying to ExxonMobil.

So – working with courts in the U.S. and Britain (the two biggest western imperialist powers) – ExxonMobil is testing the water, seeing just how strong the revolutionary movement in Venezuela is. This is especially critical, given the setback faced by Chávez in the recent constitutional referendum.

And we shouldn’t doubt the capacity of multinational corporations to use a legal fig leaf to pursue their “right” to pull exorbitant profits out of the Global South. “BP won an arbitration case against Libya in the 1970s … and chased tankers of Libyan crude around the world to seize them as payment.” In 2006 and 2007, “Western companies that purchased debt for unpaid construction work in the Congo have tried to seize tankers of Congolese oil to satisfy arbitration awards.”[8]

The ExxonMobil attacks have been met with defiance in Venezuela. PDVSA denies that any significant assets have been affected by the court action. “PDVSA is operating at 100 percent and is exporting oil all over the world,” said Venezuelan Energy Minister Rafael Ramirez.[9] February 11, Chávez said that if ExxonMobil does succeed in freezing PDVSA assets, he would halt oil exports to the United States.[10] This is a threat the U.S. has to take seriously. As well as being the fourth largest exporter of oil to the U.S., if Venezuela succeeds in certifying an additional 200 billion barrels of oil reserves to the 100 billion already certified, it will officially have the most proved reserves of oil, in the world.[11]

With so much at stake, U.S. imperialism and its corporate allies are not at the moment in a position to launch a sequel to the failed coup of 2002. Venezuela’s movement is too big, and Venezuela’s oil is too important for that to happen – for now. But we know from the bitter history of Big Oil and the Global South that this is not the last confrontation between corporate and popular power in Venezuela.

© 2008 Paul Kellogg. This work is licensed under a CC BY 4.0 license.

Publishing History

This article was published as Venezuela: The spectre of Big Oil.”, 26 February.


[1] Cited in Saul Hudson, “Chávez warns he’ll stop oil shipments to U.S.,” The Globe and Mail, Feb. 11, 2008, p. B.3
[2] Shawn McCarthy, “Exxon profit hits $40.6-billion,” The Globe and Mail, Feb. 2, 2008, p. B.7
[3] Peter Wilson, “Big Oil’s Victory in Venezuela,” BusinessWeek, Feb. 7, 2008,
[4] Brian Ellsworth, “Exxon, ConocoPhillips won’t bow to Chávez,” The Globe and Mail, June 26, 2007, p. B.12
[5] Colin Campbell, “How to win, in a fight with Big Oil,” Maclean’s, September 10, 2007, p. 62
[6] Guy Chazan, “Oil Sands Are Shifting in Alberta,” Wall Street Journal, February 5, 2008, p. A8
[7] Russell Gold, “Big Oil looks for Plan B after Venezuela,” The Globe and Mail, June 27, 2007, p. B.13
[8] Russell Gold, “Big Oil,” p. B.13
[9] “Venezuela denies PDVSA asset freeze,”, February 9, 2008
[10] Simon Romero, “Chávez threatens to end oil exports to U.S.,” International Herald Tribune, February 11, 2008,
[11] Steven Bodzin, “Exxon Gives Chávez Biggest Fight Over Nationalization,”, February 13, 2008

Published in Blog


  1. My comment should have caused neither embarassment nor confusion. It was calculated to do neither.

    Rather, it was to state my plain disagreement with the blogger who simply has the same name as I do.

    I'm an American journalist from New York. I do not subscribe to my Canadian counterpart's views and I wanted to make that very,very clear.

    To my mind and to that of many others, Hugo Chavez is a dictator and a bully. He's noisy, rude, ill-mannered and a thoroughgoing pain in the neck.

    The student movement in Venezuela seems to agree – they made sure he was prevented from altering the Consitution to suit himself. If Chavez had succeeded in that referendum, he'd have been able to run for President forever and would have likely, sooner or later, had himself declared President for life.

    Chavez is an unabashed acolyte of Cuba's Fidel Castro, whose revolution has proved nothing short of disastrous for Cuba and the Cuban people. The fact of Castro's age, and his recent illness may finally occasion some economic and societal reforms on that island nation.

    Chavez also may have been trying to influence elections in Latin America with illegal cash infusions to the candidates of his choice. I refer specifically to Argentina and to the man stopped by customs trying to smuggle in $850,000 in American currency.(see New York Times coverage).

    Latin america doesn't need a leader like Chavez. What it could use would be someone in favor of democratic reforms and better conditions for all the people of Latin America, without the Communist or leftist doctrine.

  2. Nchamah is right to defend Chavez from critics who call him a "tin-pot dictator". The US twice elected Bush in very murky circumstances. The US has nothing to teach Venezuela about democracy.

    If you're looking for the whole comment making the charges against Chavez, I've removed it. The author (bizarrely) has the same name as I do – and it was causing a little embarrassment and confusion.

    Thanks for the comment Nchamah.

  3. I am not so sure that Chavez has any tin pots about him – Venezuela has the oil – and speaking of illegitimacy have we forgetten the illegitimate means by which Bush stole the election in Florida??

    Well, comrades I have been waiting for the boycott of EXONN to be announced by others but I can't wait any longer – so it is official I hereby declare a world boycott of EXXON effective immediately – please post to all list serves this is the first move in a series of other logistic steps to be taken with the same presicion as "they" make theirs – they waited for the outcome of the referendum in Venezuela – I shall be writing an article on this to outline precisely what was at stake and it was not, by the way, the changes of the term or duration of future presidencies.

    nchamah miller

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