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Opinion and Analysis: Bolivarian Project | Economy | Oil and Gas | Opposition

The 2002 Oil Lockout: 10 Years Later

Building nearly a million homes, strengthening the national healthcare system, and creating productive sources of new employment are just a few of the things the national government could have done with the $20 billion dollars lost during the oil lockout launched by the Venezuelan opposition on December 2, 2002. That’s the way Fernando Travieso, economist and petroleum expert, interprets the opposition sabotage of Venezuela’s vital industry some ten years ago.

According to Travieso, interviewed by Venezuelan daily Ciudad CCS, the opposition’s conduct in late 2002 and early 2003 resulted in a 25% drop in the country’s oil-based Gross Domestic Product (GDP), a blow to the economy that affected all related industries and daily life for the Venezuelan majority. “The oil sabotage was, economically speaking, a catastrophe”, said Travieso. “With the resources lost during the stoppage giant things could have been done for the benefit of society”,he  affirmed.

According to statistics released by Venezuela’s state owned oil company, Petroleos de Venezuela (Pdvsa), measured in unsold oil during the two month lockout the public firm suffered $14.4 billion dollar loss in revenue. This massive hit to Pdvsa’s annual income resulted in a $9.9 billion dollar reduction in contributions to the national coffers. The final result: the Chavez administration found itself with a reduced capacity to invest in, and advance, widely needed social programs, putting an almost-complete stop to the national government’s social investment plan for the 2002/2003 period.

According to David Paravisini, oil engineer and analyst, the lockout organized by the so-called Venezuelan Workers’ Federation (CTV), the Venezuelan Chamber of Commerce (Fedecamaras), a right-wing coalition known as the Democratic Coordination (CD), and other sectors of the Venezuelan opposition, caused a wave of scarcity in basic goods (milk, rice, beef, etc.) since gasoline used to transport foods became limited.

At the same time, private industry knowingly closed its doors to citizens in need, turning scarcity into depravation. As such, the Venezuelan people were forced to live with the daily consequences of a clearly insurrectional lockout, a political maneuver aimed simply at overthrowing the President of the Republic.

Paravisini also explained that the paralyzing of the oil industry, which lasted 63 days, inflicted damage to Pdvsa that has yet to be overcome, leaving “over a thousand wells…with some 50 million barrels of oil left in them…broken during the lockout with yet no possibility (technically speaking) of getting them back into production”.

National Strike?

On December 2, 2002, the CTV, Fedecamaras, and the opposition’s Democratic Coordination called a “national strike” backed by the so-called “meritocratic” administrators of Pdvsa – together, they brought oil production to a halt. The objective of their action: force President Chavez, Venezuela’s democratically-elected President, to resign.

This was the fourth stoppage called by the opposition within a year, all of which came in response to the signing by President Chavez of 49 revolutionary laws in November 2001. The first lockout came on December 10, 2001. The second came February 9, 2002, followed by the third on October 21, 2002. All three of these, however, were limited to a stoppage in commercial activities (sales). Not unrelated, the April 2002 coup went much further, including orchestrated acts of violence and a failed attempt within the Venezuelan Armed Forces, which lasted only 48 hours, to end Venezuela’s democratic experiment with socialism.

Of the aforementioned laws passed by President Chavez, one of the issues that provoked the strongest resistance within Venezuela’s oil-based elite was that the Law of Hydrocarbons regained “oil sovereignty” for the nation and increased royalties paid by foreign companies from an embarrassing Fourth Republic (1958-1998) policy of 1%, to its current level of 33.33%.

Sabotaging Informatics with Foreign Aid

On January 17, 1997, a company known as Informatics, Business, and Technology (Intesa) was formed and tasked with optimizing the structures of information technologies used by Pdvsa. This company was born with Pdvsa investing, and owning, a 40% share, while another firm – Science Applications International Corporation (SAIC) – owned the rest (60%).

Surprising to many, however, was what the Venezuelan Ministry of Communication and Information (Minci) later revealed: SAIC is a US based company and has, among other members of its executive, ex-military intelligence officials and former directors of the Central Intelligence Agency (CIA).

According to Minci, during the oil lockout “INTESA exercised its ability to control our computers by paralyzing the charge, discharge, and storage of crude at different terminals within the national grid. It also altered the functionality of most oil substations, compressing and processing plants, etc”.

Intesa made sure, in advance, that the manipulation of PDVSA’s networks was only possible for those with access to secret internal codes – a small group of people working directly for Intesa who knowingly joined the oil lockout and kidnapped Pdvsa’s entire network using a clandestine, carefully-elaborated, pre-meditated scheme.

This scheme included the use of hidden modems installed in desks and office walls, the use of phone and internet systems to paralyze Pdvsa operations, and the destruction of databases needed to keep operations running.

This past October, Pdvsa announced that some thirty ex-employees had been sanctioned with fines between $21 and $26 million dollars for their role in the oil lockout. On November 11, 2012, investigative journalist Jose Vicente Rangel reported that numerous legal proceedings against saboteurs of Pdvsa are currently “advancing”.

According to Rangel, “a group of 185 ex-Pdvsa employees, most of which held administrative or management posts, are under investigation for acts against the Venezuelan people and public property”. Regrettably, many of these saboteurs are also fugitives of justice currently living in self-imposed exile.