Venezuela’s Oil Industry Signs New Labor Contract

Mérida, November 3, 2007 (venezuelanalysis.com)- Venezuela's
state oil company, PDVSA, signed a new collective contract this week with its
various labor unions. In addition to improved wages and benefits, the contract
involved the joining together of the various labor unions into one United
Confederation of Energy Workers (FUTEV). Energy Minister Rafael Ramirez
emphasized that PDVSA would serve as an example for the new socialist economy
under construction in Venezuela.

The new 2007-2009 contract, which goes into effect from the
beginning of November and affects almost 70,000 workers, was signed at an event
in the Caracas
headquarters on Thursday. Energy Minister Rafael Ramirez and Vice-Minister of
Labor Rafael Chacón were present at the event, along with representatives from
the labor unions.

"This begins a historical precedent in our country,
this new federation called FUTEV, in which different movements exist. It is
exemplary for the rest of the Venezuelan labor movement," said Chacón.

Among the major achievements of the new contract is a salary
increase of Bs. 12.000 (US$ 5.50) per day, bringing the standard wage for an
oil worker to Bs. 44.000 (US$ 20) per day, and Bs. 1.3 million (US$ 605) per
month. In addition to the salary increase, benefits were also improved, with
retirement pensions raised by more than 30 percent, and food discounts raised
by about 35 percent.

Workers' representative Argenis Olivares celebrated the
contract as a major accomplishment.

"It is the best contract that has been signed out of a
total on 19 that have been made with the company. We are going to build a
nation of equality; this is the beginning of the road to the construction of a
beautiful homeland," he said.

Minister Ramirez emphasized the importance of the recent
nationalization in the Orinoco oil fields of Venezuela and assured that the
inclusion of nearly 6,000 additional workers in the contract is an example of
the new changes in relation to the industry and its workforce.

"It's necessary to expand our workforce and we are
making important changes in the oil industry, such as the improvement of the
relationship with the workers, the inclusion of 5,840 people. We don't have any
problem with hiring all the workers necessary to guarantee the activity of the
oil industry," stated Ramirez.

Both Ramirez and Chacón emphasized that the most important
achievement of the contract, however, was the unification of the oil workers
unions into one single confederation.

"I think we've signed an excellent contract and we've
left a strong base for a new confederation. PDVSA must be at the vanguard of
the state-owned companies in the construction of socialism," said Ramirez.

One of the ways in which the national oil company is taking
the lead is in the development of new industrial projects. The Venezuelan oil
company has recently created new subsidiary companies to take on a whole array
of industrial ventures, from shipbuilding to agriculture.

This month the industrial subsidiary, PDVSA Industrial,
begins a joint venture with China
to import Chinese oil drills, along with the technology to begin manufacturing them
in Venezuela.
The Venezuelan government has bought a total of 13 oil drills from China country,
for a total investment of around US$ 200 million.

The second phase of the project includes the creation of a
joint company between PDVSA Industrial and the Chinese oil company CNPC. The
joint company will install a plant in Venezuela for the assembly of oil
drills, with an agreement for the eventual transfer of the Chinese technology
to produce them locally.

With these kinds of joint ventures, initiated by the
state and state-owned companies, the Chavez government plans to transfer the
necessary technology to develop industry in the country, increase national
production, and create greater technological sovereignty.