Chavez: OPEC Should Be More Political

Venezuelan, Ecuadorean Leaders See Opportunity Within Oil Cartel To Promote Anti-U.S. Agenda

(AP)  Venezuelan President Hugo Chavez has found an ally in Ecuador as he seeks to expand his influence within OPEC at a time when analysts say his country is struggling to maintain oil production.

Ecuador will be represented by President Rafael Correa this weekend at the Organization of Petroleum Exporting Countries summit in Saudi Arabia as the Andean country reactivates a membership that has been suspended since it stopped paying cartel dues in 1992.

Chavez is pleased with Ecuador's return, and analysts say his reasons range from the political to the practical. They say he wants to keep OPEC oil production quotas in check and prices high - a stance Ecuador appears to share - while also pushing the cartel to take on broader political roles internationally.

"OPEC must be an organization that goes beyond energy, and it must have political characteristics," Chavez said Tuesday, proposing that OPEC come up with a plan to sell oil to poor countries at dramatically lower prices than those paid by wealthy nations. The cartel, he stressed, should "raise its level of political action."

That stance is likely to be echoed by Correa, who shares Chavez's antagonism toward Washington and his critiques of free-market capitalism. Even with Ecuador on board, though, analysts say Venezuela won't easily sway other OPEC members to restrain production in the long-term if oil powers like Saudi Arabia push for an increase.

"Chavez and other more hawkish members within OPEC will gain an ally in Ecuador, which has an interest also in defending a reasonably high price benchmark in order to maximize revenues," said Patrick Esteruelas, an analyst at the New York-based Eurasia Group. "It will still prove very little essentially against Saudi Arabia, which overshadows both countries combined."

Ecuador is a marginal oil producer with approximately 507,000 barrels a day in production - a small industry that would be hard-pressed to increase output. Analysts say the influence gained by Chavez within OPEC will be modest.

In September, OPEC bowed to pressure from U.S. ally Saudi Arabia and announced a production increase of 500,000 barrels a day, effective Nov. 1. There has been speculation the Saudis, OPEC's top producer and most influential member, could soon press for another similar output increase, which could send oil prices lower.

Saudi Arabian Oil Minister Ali al-Naimi said Tuesday that OPEC will not discuss output levels at this weekend's summit, but that it may discuss increasing production at a meeting next month in the United Arab Emirates.

John Hall, an analyst with John Hall Associates in London, noted that the Saudis successfully pressed for the last 500,000 barrel-a-day increase despite opposition from other key members.

"The Saudis can do things like that, but Chavez cannot," Hall said.

This week's summit won't offer Venezuela's president a chance to argue against increased production quotas, but it will give Chavez and another OPEC leader - Iranian President Mahmoud Ahmadinejad - another opportunity to bash U.S. President George W. Bush.

"He's gathering allies around the world, and within the OPEC cartel, who will back him up when he says 'We hate America,'" Hall said. "It helps him campaign against Bush."

Oil analysts say if OPEC eventually decides to boost output, it could put Venezuela in a bind. Venezuela is by the accounts of many oil watchers struggling to maintain production.

According to OPEC's October report, Venezuela's production fell from an average of 2.53 million barrels of oil a day in 2006 to an average of 2.38 million barrel a day during the first three quarters of 2007.

Venezuelan Oil Minister Rafael Ramirez has disputed those figures, saying Venezuela's output is more than 3 million barrels a day.

But oil analyst Juan Carlos Sosa says the state oil company continues to suffer from disorganization and a loss of personnel resulting from a two-month anti-Chavez strike that paralyzed the industry and ended in early 2003 with Chavez dismissing thousands of employees.

"The reality is that investment needed to maintain output is down and production capacity has been lost," said Sosa, editor of the Venezuelan oil industry magazine PetroleoYV.

Esteruelas said social programs are sapping billions from dollars from Petroleos de Venezuela SA that would otherwise go toward investment, while at the same time the state firm is trying to consolidate control over the industry after assuming majority shares in the last privately run oil fields in May.

The OPEC secretariat says it is still unclear whether Ecuador will formally join OPEC at this month's summit or next month's meeting.

The cartel supplies about four out of every 10 barrels on world oil markets.

[eggy1620]

Unfortunately for Chavez, OPEC is predominantly staffed by religious lunatics, not political lunatics.

[logicanada]

one_american...I suppose you would have The U.S. bring freedom to Venezuela as the brought freedom to Iraq, Afghanistan, Pakistan, Panama,...oh, and the U.S. itself?
You must figure that the states is entitled to every resource the world has to offer.
You are either ill informed or not thinking clearly.No wonder your country is going down the toilet.

[brianbwb-2009]

This, after all, is an act of war by Chavez.
Posted by One_American

So I take it you believe that the US bombing and invading OPEC countries like Iraq and, if the Bush klan gets its way, Iran, are not acts of war?

[brianbwb-2009]

If Chavez thinks OPEC are not political already, he should just look at their support for the US dollar, they are the only ones giving it any value whatsoever, and they won''t let it collapse because they have too many of them. Thusly they sell out the lives of their own brethren, and the US is more than willing to kill them.

The US does need to have it''s global hegemonistic ambitions stopped, but OPEC is not the way. The Saudi royalty thinks that since they control the Bush klan, that they will be able to control all US presidents. This will prove their undoing sooner or later as they Take Euros as payment for oil, and one by one if necessary, convince non Arab OPEC oil and gas producers, like Nigeria, Malaysia and Indonesia to do likewise. Next, refuse to acctpt dollars as payment for other exports, gradually tightening the noose.

This will force the US to curb its colonialist bent, and either negotiate, or face economic extinction.

[one_american]

If Chavez is truly trying to make OPEC a political organization so that it can hold America hostage through its oil, then Chavez should be taken out.

This, after all, is an act of war by Chavez.

[jerr11]

In the words of the King:

"SHUT UP!"

[one_american]

Oscarez:

I''ll bet you used to say the same thing about your hero, Saddam Hussein.

[oscarez]

One_American you are so funny. Hugo Chavez will be around a long time after your man Bush is gone. That is unless Bush sends the CIA and FBI to Assassinate Chavez. Bush, being a good Christian, will see this as his duty.

[one_american]

One day soon the Venezuelan Dictator will be swinging from the end of a rope, and then finally the good people of Venezuela will be free.

[ov442]

The reason Chavez''s social programs arent panning out, is because he has agendas other than social assistance. A) he should have used the money to improve infrastructure first. B) then healthcare.
Both of those would have increased education and jobs.
C) business attraction and transportation. Again more jobs, but would increase external investment as well as popular appreciation.
But nope. he is just another petty dictator using the guise of socialist agendas to attack persecute and destroy opposition and basically people who know something.
Communism did the same thing. Wiped out China and Russia''s education, history, languagges, arts, and made into nations of closed minded, brainwashed generations with no self determination.