INDEPTH: VENEZUELA
Venezuela and oil
CBC News Online | Updated November 27, 2003
Oil is the uncontested fuel of Venezuela's economic engine. According to the CIA World Factbook, oil accounts for approximately one third of the country's $146.2-billion GDP, and 80 per cent of export earnings. In 2002, Venezuela was the eighth-largest oil producer in the world, accounting for 4.3 per cent of world production.
That's a drop from a year earlier when it was the sixth-largest producer accounting for 4.8 per cent of world production. This came in large part as a direct result of a nation-wide strike in December 2002, which severed Venezuelan oil exports. The United States relies on Venezuela for about 10 per cent of its oil supplies.
| World Oil Production 2002 (source: International Energy Agency) |
| Producer | Million tonnes of oil | % of World Production |
| Saudi Arabia | 409 | 11.5 |
| Russia | 378 | 10.7 |
| United States | 350 | 9.9 |
| Mexico | 178 | 5.0 |
| Islamic Republic of Iran | 176 | 5.0 |
| People's Rep. of China | 169 | 4.8 |
| Norway | 156 | 4.4 |
| Venezuela | 153 | 4.3 |
| Canada | 133 | 3.7 |
Controlling Venezuela's massive oil enterprise is state-run juggernaut Petróleos de Venezuela, S.A. (PDVSA), which provides the country with more than one half of all government revenues.
With the ebb and flow of the oil industry goes the flow of Venezuela's economic and political well-being.
Venezuela's oil fight
At the heart of recent strife in Venezuela is a fight over the country's oil industry. On one side is leftist President Hugo Chavez. Elected largely with the support of Venezuela's poor, Chavez is an ardent supporter of OPEC's efforts to keep world oil prices high.
In February 2002, Chavez appointed a board of directors at the state-controlled oil monopoly PDVSA, leading to suspicions he was trying to exercise direct control over the country’s oil industry. The appointments were the focus of demonstrations in April, where there were calls for Chavez to resign. Fourteen demonstrators died in a day of violence that saw gunmen loyal to Chavez fire into a crowd.
The violence prompted military commanders to take Chavez into custody for several days.
The head of Venezuela's largest business association, Pedro Carmona, took over as the country's transitional leader. Two days into his reign, however, Carmona resigned under pressure from Chavez supporters, and the former leader was returned to power.
Since that time there have been repeated calls for Chavez to relinquish the presidency, either through resignation or by calling elections. The calls came to a head in December 2002 when millions of workers walked out in a general strike aimed at ousting Chavez from power.
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