Aug
29
2012
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Explosion at Oil Refinery Raises Concerns about PDVSA’s Infrastructure

Amuay refinery explosion Explosion at Oil Refinery Raises Concerns about PDVSAs Infrastructure

Courtesy of: AFP / Getty Images

Early Saturday morning, a massive explosion occurred at Venezuela’s largest oil refinery, killing 48 and injuring 80, stopping production, and rocking the nearby town.

Residents reported smelling gas the night before, but many thought nothing of it, as the odor had occurred many times before. This time, however, was different. At 1 a.m. an explosion engulfed the refinery and also destroyed homes in the town of Amuay, injuring residents who were still sleeping. Two hundred homes were damaged by the blast and 33 families were displaced.

The fires burned for three days, causing several more oil tanks to explode, and were only extinguished yesterday. The refinery has not resumed production, and may not do so for several more days. Concerns remain that once production resumes, the fires may flare up again. Investors, meanwhile, worry that the halt in production from one of the world’s largest refineries could drive up prices.

President Hugo Chávez arrived on the scene Sunday, roughly a day and a half after the explosion first occurred, declaring three days of mourning for those killed in the accident. His initial response was to deny the residents’ reports of the gas leak, telling a reporter that it was “impossible” that there was any deficiency in maintenance at the plant. However, El Nuevo Herald reports that documents from a reinsurance agency that performed an inspection of the plant in March detailed a long list of maintenance problems and safety issues.

Chávez has promised a full investigation though, in light of his original remarks, some question how thorough it will be or whether it will be made public.

The accident calls attention to the decay of the PDVSA’s infrastructure, which has seen a steady decline in production since Chávez took power in 1998. Although Venezuela possesses the largest proven oil reserves of any nation, it lacks the infrastructure to extract and refine this oil safely and efficiently, a shortcoming which has caused serious problems for its economy.

The event couldn’t come for a worse time for Chávez, as new polls show opposition candidate Henrique Capriles with a lead in the polls. It also comes on the heels of an embarrassing moment last week when Chávez was blindsided by protestors in a national broadcast as well as another large prison riot, on which Chávez has refused to comment.

Upon arrival at Amuay, Chávez expressed solidarity for the victims and then stated, somewhat oddly, that “the show must go on.” Indeed, with just over a month before the presidential elections, Chávez probably wishes he could put this all behind him.

 
Aug
29
2012
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Venezuela’s Chávez faces new election threat — a run of calamities

In recent weeks, Venezuelan President Hugo Chávez has faced prison riots, a bridge collapse and the country’s most lethal oil-industry disaster. Some wonder if the woes will stick to the Teflon comandante.

The Miami Herald

August 29, 2012

By Jim Wyss | [email protected]

MDG Venezuela President 008 300x180 Venezuelas Chávez faces new election threat — a run of calamities

Courtesy of: Leo Ramirez / AFP

BOGOTA — It’s been a rough month for Venezuelan President Hugo Chávez. In less than two weeks, he has had to deal with a deadly prison riot, a collapsing bridge, flooding, an embarrassing confrontation with steel workers on live TV and the country’s worst oil-industry disaster, which killed at least 41 and still has families digging through the rubble looking for loved ones.

The avalanche of bad news would be hard on any leader, but this train of troubles comes as Chávez, 58, is heading into an Oct. 7 presidential race that polls suggest is getting tighter.

For the last 14 years in office, Chávez has played the roll of an energetic leader with a common touch. Even when his administration had missteps, voters rarely held their charismatic comandante accountable.

But the scale of this month’s calamities might change that dynamic, said Xavier Rodríguez Franco with Entorno Parlamentario, a legislative watchdog group.

“The events the country has had to face recently clearly show a breakdown in the government’s ability to manage,” he said “And that breakdown is dragging down the president’s image.”

Chávez’s days of discontent started Aug. 15 when a vital bridge connecting Caracas to eastern Venezuela collapsed. Four days later, gangs at the Yare I penitentiary confronted each other with guns and explosives leaving 26 dead, including a visiting family member. It was an embarrassment for an administration that has declared prison security one of its top concerns but has been unable to staunch the bleeding. During the first half of this year, 304 inmates have been killed and 572 have been injured, according to the Inter-American Commission on Human Rights, which called on the government to step up efforts to disarm prisoners.

The following day, Chávez traveled to the city of Guyana to hold a live broadcast — carried on all TV and radio stations — with workers of the state-run Sidor steel plant. Presidential cadenas are usually tightly scripted and designed to highlight government achievements, and they’re a key part of Chávez reelection strategy.

That’s why Venezuelans were surprised to see steel workers shout over the president and complain that the government hadn’t renewed their labor contract, which expired over two years ago. Amid the commotion, Chávez’s microphone was cut and the broadcast abruptly ended. It was the first time that anyone could recall a cadena being cancelled mid-transmission.

That the outburst took place in a Chávez stronghold (he won 68.8 percent of the vote in Bolivar state in 2006) only underscored the sense of malaise.

Russ Dallen, managing partner at Caracas Capital Markets financial firm, said Chávez appears to be distracted by his battle with an undisclosed form of cancer — which dates back to at least June 2011 — and which the president claims to have beaten.

“This is not the Chávez we have come to know over the last decade and a half,” he said. “Clearly, his illness has affected him and he’s not the maximum leader he has been in the past. And that’s why you see so many things collapsing, and this time the problems are sticking.”

But all the troubles were overshadowed early Saturday, when a huge fireball erupted at the   refinery, part of the nation’s largest refinery complex. The blast left 151 wounded and homes leveled.

The government said the plant would be operating again within two days, but the fire was only subdued on Tuesday and the administration now says it won’t be operational until Friday.

Critics blame Chávez, who they say has used the state-run oil company PDVSA, which operates the refinery, as a cash-cow for his pet projects even as it neglects maintenance and repairs.

In 2011, the company invested $39.6 billion in popular social programs, including $4 billion in the government’s housing program. But seven out of nine maintenance programs planned for Amuay that year were postponed due to lack of materials, wrote Daniel Kerner, with the New York-based Eurasia Group, citing PDVSA’s 2011 annual report.

The Amuay accident “highlights PDVSA’s significant operational problems stemming from both severe mismanagement and underinvestment,” he wrote. “In recent years, the firm has become a key financing arm for President Hugo Chávez’s social programs limiting PDVSA’s investment capacity in a context where crude production… has steadily declined.”

The man fighting Chávez for the presidency, Henrique Capriles, 40, has called for full investigations into Amuay, the jailhouse riot and the bridge collapse. Earlier this week, he likened the string of problems to a disaster film.

“This isn’t a movie that unfolds chapter by chapter,” he said. “It’s unconscionable that the government’s candidate [Chávez] can irresponsibly and insensibly say that the show must go on.”

For the moment, Chávez is leading most polls. Datanalisis, a closely followed pollster, has Capriles with 34.3 percent of the vote and gaining versus Chávez’s 46.8 percent. Consultores 21, another major polling firm, however, shows Capriles with a thin lead, at 47.7 percent versus Chávez’s 45.9 percent.

It’s too early to tell if August’s woes will move those numbers. But Kerner predicted the Amuay disaster is “probably not a game changer…Chavez still remains favored to win, but the accident could sway some undecided voters.”

Chávez has pledged millions in aid and offered to build thousands of new homes for Amuay residents. He’s also trying to turn the tables, accusing opponents of being “vultures” who want to turn disaster into political gain.

“Just as we see streams of foam putting out the fire in Amuay,” he said this week, “the bourgeoisie is also using disgraceful streams to try to put out our patriotic fire and fervor.”

To read this article on The Miami Herald, please click here.

 
Aug
27
2012
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What’s Next Venezuela Election Update: August 27, 2012

vene1 What’s Next Venezuela Election Update: August 27, 2012

Courtesy of: Woodrow Wilson Center

Opposition candidate Henrique Capriles has taken a lead over President Hugo Chávez in the polls, with less than six weeks remaining until the elections. Many, including the candidate himself, credit the swing to Capriles’ exhausting town-by-town campaign through Venezuela, while Chávez continues to use the government’s power to call mandatory national broadcasts. It appears that the president’s campaign has started to unravel, with several recent gaffes where he was heckled and protested at official events. The status of his cancer still unknown, but not yet entirely healthy, he has launched a new campaign featuring images of an imagined younger version of himself to try to attract the youth vote. Both candidates have also been running extensive social media campaigns, with Capriles focusing on Facebook to try to overcome Chávez’s domination of traditional media. Meanwhile, Chávez’s government has not invited a full observer for the elections, leading to questions about what might happen if the results are contested.

Chavez Trails Rival Capriles for First Time in Poll, Businessweek

Venezuelan President Hugo Chavez trailed opponent Henrique Capriles Radonski for the first time in a Consultores 21 poll ahead of elections in October.

Capriles tries to outdo Chavez in display of dynamism, Reuters

Anyone doubting Henrique Capriles’ commitment to a daunting election battle with Venezuela’s President Hugo Chavez should take a look at his neck. Or his elbows.

“Abusive” Chavez set for Venezuela vote shock: rival, Chicago Tribune

President Hugo Chavez’s abuse of state resources for his re-election campaign and lack of personal contact with Venezuelans will cost him dearly at the October 7 vote, his opposition rival says.

Venezuela’s presidential campaign: Gaining ground, The Economist

Technical glitches, heckling from his own supporters, thinning crowds and bad polling news. With just over six weeks to go before Venezuela’s presidential election, Hugo Chávez’s bid for another six years in office no longer looks quite the push-over it once seemed.

In Venezuela presidential race, Chavez enjoys advantages in campaign funding, airtime, AP

Opposition candidate Henrique Capriles typically runs his presidential campaign by jogging through Venezuela’s small towns, reaching out to supporters with both hands and climbing aboard the back of a flatbed truck to speak to hundreds of people.

Chávez projects youth ahead of Venezuelan elections, Miami Herald

Hugo Chávez dunking a basketball. Hugo Chávez dancing rap. Hugo Chávez with a teenager haircut, boxing, riding a motorcycle, screaming with joy while doing a wheelie.

Capriles vs Chávez Online: Venezuela’s Social Media Split, AS/COA

In the lead up to Venezuela’s October 7 presidential election, much of the campaign is being waged via social media.

Carter Center Says It Won’t Witness Venezuela Vote, AP

The Carter Center said on Monday that it declined an invitation from Venezuela’s National Electoral Council to have a team at the country’s Oct. 7 presidential election.

Counting on Chávez, Foreign Policy

The state of Hugo Chávez’s health has prompted plenty of speculation and debate across Washington and among the Venezuelan president’s universe of Twitter followers, but for some of his regional friends, the stakes are particularly high.