Jul
30
2012
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Does oil giant Chevron want Chavez to win reelection in Venezuela?

Chevron has been in Venezuela since the 1920s when politicians were heavier handed than Chavez. Now, Chevron in Venezuela may be too big to nationalize, writes a guest blogger.

Christian Science Monitor
July 30, 2012
By Steven Bodzin, Guest blogger

0730 world ochevron full 380 300x199 Does oil giant Chevron want Chavez to win reelection in Venezuela?

Courtesy of: Carlos Garcia Rawlins/Reuters

A couple days ago, Raúl Gallegos published a decent little column about how Chevron is, if not betting on a Hugo Chávez reelection, at least setting itself up for a long, happy relationship with the Bolivarian Republic.

Chevron has no illusions about how Venezuela works. It first set up shop there in the 1920s, when strongmen showed heavier hands than Chavez. Scores of populist governments and two oil-industry nationalizations later Chevron is still pumping crude. And when PDVSA asked for a couple of billion to invest in Boscan, a jointly-run field Chevron first came across in the 1940s, the oil major obliged. The 13-year loan is costing PDVSA Libor plus 4.5 percent, far less than the 11 percent that its 2027 bonds pay.

I quibble with a bit of the column, but basically, he’s right. Chevron in Venezuela is now too big to nationalize.

I had thought Repsol fell into the same category. But maybe not. Check out this article from last night.

Venezuela President Hugo Chavez warned Repsol SA (REP) to “think carefully” about taking action against Argentina after it nationalized its YPF SA (YPFD) unit, indicating the Spanish company may face ramifications in Venezuela.

“They have a lot of investment here in Venezuela,” Chavez said on state television after holding a meeting with Argentine Planning Minister Julio De Vido in Caracas. “What happens there in Argentina affects what happens here.”

What jumps out here is that Chávez has never made any similar threats against Chevron over its $18 billion debt to ostensible ally Ecuador. If you haven’t followed that whole story, here’s an article, the plaintiff’s version and the company’s version, but long story short, Chevron was sued in the US for polluting Ecuador. It got the case moved to Ecuador, apparently thinking courts there would be friendlier. Courts there ruled against the company and ordered a huge amount of compensation. Chevron insists that the rulings were flawed by corruption, though I think it’s fair to ask, if they were worried about corruption, why did they get the case moved to Ecuador? The whole thing is a mess.

If Chávez were ideological, you’d think that the anti-Chevron campaigners would find open ears in Venezuela, and would even now be auctioning off the Boscan oilfield to pay the Ecuador debts. Instead, I don’t think Chávez has ever mentioned the case. And Chevron is piling in ever more billions of dollars.

To read this article on Christian Science Monitor, please click here.

 
Jul
30
2012
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ICYMI: Cocaine’s Flow Is Unchecked in Venezuela

The New York Times
July 26, 2012
By William Neuman

LA MACANILLA, Venezuela — The Venezuelan government has trumpeted one major blow after another against drug traffickers, showing off barrels of liquid cocaine seized, drug planes recovered, cocaine labs raided and airstrips destroyed.

But a visit this month to a remote region of Venezuela’s vast western plains, which a Colombian guerrilla group has turned into one of the world’s busiest transit hubs for the movement of cocaine to the United States, has shown that the government’s triumphant claims are vastly overstated.

Deep in the broad savanna, one remote airstrip the government said it had disabled in a recent army raid appeared to be back in business. The remains of two small aircraft set on fire by the army had been cleared away. Traffickers working with the Revolutionary Armed Forces of Colombia, which operates with surprising latitude on this side of the border, appeared to have reclaimed the strip to continue their secret drug flights shuttling Colombian cocaine toward users in the United States.

There were no signs that soldiers had blasted holes in the runway or taken other steps to prevent it from being used again.

For years, the United States has been working with friendly governments in Colombia, Mexico, Honduras, Guatemala and other countries in Latin America, spending billions of dollars to disrupt the flow of drugs northward. But because of antagonistic relations with President Hugo Chávez of Venezuela, the reach of American drug agents, and the aid that comes with them, does not extend here.

“Our airspace has been taken over,” said Luis Lippa, a former governor of Apure State who plans to run again as an opposition candidate in elections in December. Referring to the grip of traffickers on the border region, he said, “Our national territory has been reduced.”

venezuela drug trafficking routes ICYMI: Cocaine’s Flow Is Unchecked in Venezuela

Radar data collected by the United States government shows what are believed to be illicit drug flights, mostly between Venezuela and Central America. Country names have been added. (Courtesy of: Joint Interagency Task Force South)

A map of flight tracks made by a United States government task force using data from long-range radar makes the point vividly: a thick tangle of squiggly lines, representing drug flights, originates in Apure, on Venezuela’s border with Colombia; heads north to the Caribbean; and then takes a sharp left toward Central America. From there, the drugs are moved north by Mexico’s well-established traffickers.

President Obama signed a memorandum in September that designated Venezuela, for the seventh time, as a country that failed to meet international obligations to fight drug trafficking. He cited a federal report that concluded that the country was “one of the preferred trafficking routes out of South America” and had a “generally permissive and corrupt environment.”

Venezuela says that it is caught in the middle — Colombia produces the drugs and the United States consumes them — and that it is doing all it can to fight back. In May, the government announced that the number of illicit flights it detected had been cut in half this year, although it declined to provide data to back up the claim.

“We are hitting drug trafficking hard all the time,” said Ramón Carrizalez, the governor of Apure, the border state where the drug flights originate, speaking in May at a news conference to announce the destruction of 36 hidden airfields. “Very few countries are carrying out a policy like ours.”

But the United States says Venezuela’s efforts are deeply hobbled by corruption, particularly by ties between the government and the Revolutionary Armed Forces of Colombia, known as the FARC, which controls much of the cocaine traffic in the region.

Since 2008, the Treasury Department has accused at least seven high-level military officers and current and former officials in Mr. Chávez’s government of aiding the FARC, and sometimes exchanging weapons for drugs. Defense Minister Henry Rangel Silva was one of those singled out by Treasury officials. Venezuela dismissed the accusations as imperialist meddling.

The White House Office of National Drug Control Policy estimates that as much as 24 percent of the cocaine shipped out of South America in 2010 passed through Venezuela, accounting for more than 200 tons.

More than half of that left from the hidden airfields in Apure, analysts say. They say that Venezuela’s central role as a transit point for drug shipments began after Mr. Chávez halted cooperation with the United States Drug Enforcement Administration in 2005, accusing its agents of spying.

Around the same time, Colombia, with assistance from the United States, began to tighten control of its airspace.

As a result, the traffickers jumped across the border to Apure, where an airstrip can be fashioned on the flat prairie in a few hours by dragging a log behind a pickup truck to smooth the ground.

“You can blow up an airfield here and it doesn’t matter,” said one resident, standing beside an eight-foot-deep hole that soldiers had blown in a runway near the Cinaruco River, the plains stretching out for miles. “They can make another one right next to it.”

But perhaps the main attraction for traffickers is that the federal government’s hold on large parts of Apure, the poorest state in the country, is tentative at best.

In many areas, residents say, the real power is held by the FARC, which they describe as moving around the state with alarming impunity.

One resident living in Santos Luzardo National Park, a picturesque preserve abounding in wildlife, said that last month two FARC members patrolled the remote area on motorcycles, asking farmers if they had heard any airplanes, apparently concerned that traffickers were using a nearby airstrip without paying.

The guerrillas also collect protection money from local businesses, ranchers and fishing camps along some parts of Venezuela’s long border with Colombia. One resident said that a small group of FARC members showed up at a homestead in December and set up camp for a week, using it as a base to patrol the area and possibly protecting drug flights. He said the owner had no choice about whether to accept, although the guerrillas brought their own food.

The residents also expressed fear and mistrust of government authorities. Most said they believed that local officials and soldiers were in league with the traffickers and that passing along information about the traffickers’ activities would result in reprisals. Residents said they had learned to coexist with the traffickers just as they had gotten used to the frequent sound of low-flying aircraft at night. But many said they were fearful and felt intimidated.

“We all knew what was going on, but no one said anything,” a man said of the smugglers who used a local airstrip. “What were we going to do about it? The one that should be doing something is the government. They should be constantly patrolling the area.”

Meridith Kohut contributed reporting from La Macanilla; María Eugenia Díaz from Caracas, Venezuela; and Jenny Carolina González from Bogotá, Colombia.

To read this article on The New York Times, please click here.

 
Jul
27
2012
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In Case You Missed It… Articles Roundup Week of 7/27/12

jp venezuela1 articleLarge In Case You Missed It… Articles Roundup Week of 7/27/12

An aircraft burned in a drug raid in Apure State. Afterward, traffickers appeared to have reclaimed the airstrip for drug flights. (Courtesy of: Meridith Kohut for The New York Times)

Hugo Chávez is making good on his threat to remove Venezuela from the Inter-American Commission on Human Rights after a recent ruling against his government. The action is just one more in a series – including allegedly plotting a coup in Paraguay and threatening the Spanish oil company Repsol – that have many analysts warning that Chávez is setting a dangerous precedent of radicalization in the region. With the elections just over two months away, Chavez’s government has dramatically increased spending and tightened its control of the media. Venezuelans continue to worry about the country’s high crime rate and investigations show that the drug trade continues unchecked. Meanwhile, Venezuelans remain uncertain about Chávez’s health and alleged recovery.

Hugo Chavez says Venezuela will pull out of regional human rights court, condemns decision, Washington Post

Venezuelan President Hugo Chavez said Tuesday that his government will pull out of the Inter-American Court of Human Rights in protest after a ruling that he called a travesty.

Chávez a threat to the hemisphere, Miami Herald

During a recent interview on A Mano Limpia, hosted by Oscar Haza on WJAN-Channel 41 (Florida), President Obama declared that Venezuela’s President Hugo Chávez has not posed “a serious” national security threat to the United States.

Paraguay prosecutor calls Lugo to testify in probe against Venezuelan foreign minister, Associated Press

Paraguay’s former President Fernando Lugo must testify in an investigation over alleged Venezuelan meddling during his impeachment, prosecutors said Tuesday.

Venezuela’s Chavez Threatens Repsol Over YPF Arbitration Case, Bloomberg

Venezuela President Hugo Chavez warned Repsol SA (REP) to “think carefully” about taking action against Argentina after it nationalized its YPF SA (YPFD) unit, indicating the Spanish company may face ramifications in Venezuela.

Facing election, Hugo Chávez ruthlessly consolidates his power, Washington Post

NOT FOR THE first time, Venezuelan President Hugo Chávez has declared himself cancer-free and ready to resume a full schedule.

Chavez says he won’t stop taking over airwaves, AP

President Hugo Chavez said Sunday that he will not stop seizing control of Venezuela’s airwaves to give his trademark marathon television and radio addresses despite complaints from his challenger that it gives him an unfair advantage during the country’s presidential election campaign.

Venezuela’s productivity problem, Foreign Policy

While much of the developed world is mired in sluggish growth or downright recession, a few days ago Venezuela came out with healthy GDP figures.

Me or your own eyes, The Economist

ÉDGAR TORRES, a toddler in the Venezuelan state of Aragua, was asleep in bed when a gang from up the hill came looking for his mother’s 16-year-old godson.

Cocaine’s Flow Is Unchecked in Venezuela, New York Times

The Venezuelan government has trumpeted one major blow after another against drug traffickers, showing off barrels of liquid cocaine seized, drug planes recovered, cocaine labs raided and airstrips destroyed.

Chávez’s allure, Venezuela’s disaster, Miami Herald

When Churchill was once asked about some aspect of the Soviet Union’s foreign policy, he made a memorable statement, tinged with humor: “It is a riddle wrapped in a mystery inside an enigma.”