Context of 'February 1, 2005: Chavez Says Venezuela Considering Sale of Oil Refineries'

Hugo Chavez is elected president, beating Henrique Salas Romer, a Yale-educated former governor of Carabobo state. [CNN, 12/6/1998; CNN, 12/7/1998; New York Times, 12/9/1998]

For the two-month duration of a strike in Venezuela (see February 3, 2003), the only commercials on Venezuelan TV are pieces by the opposition attacking President Hugo Chavez. [Adage, 2/10/2003]

Venezuelan President Hugo Chavez’s government signs a deal with China to expand its oil market into China in search of more lucrative deals. [United Press International, 1/30/2005; Bloomberg, 2/2/2005]

President Hugo Chavez announces that the Venezuela controlled oil company, Petroleos de Venezuela, may sell eight oil refineries owned by US companies. Four of them are owned by Citgo Corporation and are currently used to refine Venezuela’s heavy, high-sulfur crude oil for use in the US. This move is part of a strategy to reduce Venezuelan dependency on US oil markets. At his speech in Argentina, Hugo Chavez describes Venezuelan dependency: “Not one Venezuelan works at these refineries… they don’t give us one cent of profit… they don’t pay taxes in Venezuela… this is economic imperialism.” Ivan Orellana, Venezuela’s representative to OPEC says that any “contracts found to be not in the national interest would be renegotiated.” [Bloomberg, 2/2/2005] The Venezuelan oil industry currently exports half of its oil to the US. [New York Times, 1/25/2005] This latest move is an indication to the Bush administration that the Chavez government is willing to test their relationship. US officials are worried about the implications of the sale for the American economy as 15 percent of US oil imports currently come from Venezuela. White House spokesman Scott McClellan says, “we have serious concerns. We have made our concerns known when it comes to President Chavez….” [Bloomberg, 2/2/2005]

President Hugo Chavez of Venezuela accuses the US government of planning “new aggressions” against him. The aggressions, Chavez describes, include another attempted coup and an assassination attempt. Chavez warns US president George W. Bush that if an assassination attempt was successful the people of Latin America would assume that democratic rules “no longer apply.” Chavez warns that another consequence of his assassination would be an “interruption of the flow of oil to the US.” Chavez asks that Bush consider these consequences before making a decision about his assassination. [Venezuela Analysis, 2/20/2005]