|National Assembly President Nicolas Maduro|
Caracas, May 10, 2005—Venezuela’s National Assembly (AN) is opening an investigation, today, into oil contracts signed under previous administrations. The announcement, made last week by President of the AN Nicolás Maduro, comes after Venezuelan President Hugo Chávez denounced the attack against Venezuela’s state oil company PDVSA by the private media as an attack against Venezuela’s continuing process of “rescuing” the national oil industry.
According to Maduro, the AN will designate a special commission to revise all of PDVSA’s contracts to ascertain whether representatives of government or transnational oil companies “violated the Constitution or the terms of the conventions [or] violated the law…”
Ex-Presidents of Venezuela, former cabinet ministers and deputies to the AN, ex-Presidents of PDVSA and functionaries could all be called into the AN for questioning. Once responsibility is established, said Maduro, transnational oil companies may be forced to pay indemnities to the Venezuelan state for damage to the National economy and to oil infrastructure.
Speaking to the press yesterday, superintendent of Seniat José Vielma Mora noted that of the 22 oil companies currently operating in the country, six owe a combined US$30 million to the state. Seniat will be reviewing the remaining 16 companies to assure that they have been paying sufficient taxes, but Energy and Oil Minister and Director of PDVSA Rafael Ramírez estimated that transnationals could owe as much as US$2 billion.
In Venezuela “one average person pays more taxes than a transnational,” Mora told journalists at an act commemorating Seniat workers yesterday in the capital Caracas.
Mora’s comments were made in response to Chávez’s accusations on Friday that certain transnational oil companies currently operating in Venezuela are evading taxes.
The tax investigation is the latest move in what Chávez has called the “rescuing” of the oil industry. Though every government since since the discovery of oil in Venezuela in the 1930s has promised to equally distribute oil revenues, Venezuelan oil wealth has traditionally been recycled within the same group of national and international elites.
Venezuela’s oil industry was opened to private investment in the 1990s for the first time since nationalization in 1975. Since that time Venezuela has signed 32 operating agreements with 22 companies.
Chávez’s “Bolivarian revolution,” named after independence leader Simón Bolívar, promised to seriously reform PDVSA, which had long been considered a “state within a state,” operating with near total independence from the state. His timid first steps in this direction where met with vitriolic protest by the traditional labor confederation and the country’s main chamber of commerce who shut down the oil industry for two months in early 2003. In the wake of the shutdown, Chávez radically reformed PDVSA, firing approximately 18,000 workers who abandoned their posts or allegedly engaged in sabotage during the shutdown, and replacing the company’s directors.
Since this “re-nationalization” of PDVSA, it has provided funding for nationwide campaign bringing adult education and doctors to the country’s poorest neighborhoods, and begun reasserting the state’s role in the oil industry. Last fall PDVSA raised royalties on extra-heavy crude extraction in the Orinoco Oil Belt from 1% to 16.66%, and last month, Ramírez announced that private oil companies operating in the country must convert to joint ventures with the government within six months.
“Here’s the reason for the attack against PDVSA,” said Chávez on Friday, referring to resent critiques in the opposition media. “This attack…by all the private [media] is no coincidence…it has a root: the new actions that we are taking to continue rescuing our oil sovereignty,” said Chávez.“The important thing is that these documents begin coming to public light,” said President of the AN, Nicolás Maduro earlier today, in presenting a motion to create a commission to investigate the oil contracts at the AN. These documents “have been hidden and destroyed, [they] were not in the principle national archives…have been discovered thanks to an investigation led by the Ministry of Energy and Oil,” said Maduro. “These documents reveal grave irregularities that threaten to damage the country.”