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Venezuela Opposition Candidate Slams Chavez Oil Deals

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PUERTO LA CRUZ, Venezuela - Opposition presidential candidate Henrique Capriles laid out broad plans for Venezuela's oil sector Wednesday, pledging to revise agreements President Hugo Chavez's government has made with certain allies if he wins the October election.

"Not a single barrel of oil will be gifted to another country," Mr. Capriles told a rain-soaked rally in the northern, oil-rich state of Anzoategui, just in the shadow of the country's Puerto La Cruz refinery.

The candidate criticized accords approved under Mr. Chavez's 13-year tenure, where the import-dependent country trades oil for food as well as paying off debts. Venezuela is paying off billions of dollars in loans from China with oil and also sends it to allied leftist countries around the world. Mr. Capriles in particular targeted oil going to Belarus, which he wants to cut. Most recently the Chavez administration faced scrutiny for sending diesel to Syria.

Such deals cost Venezuela nearly $7 billion in 2011.

Mr. Capriles said he aimed to double Venezuela's crude production to 6 million barrels a day. The campaign's proposal also outlines plans to boost private investment into the sector.

Though devoid of many policy specifics it was one of few campaign speeches that Mr. Capriles has dedicated specifically to oil, which makes up 95% of Venezuela's exports. Until now, much of his campaign has focused on addressing the high crime rate that make Venezuela one of the region's most dangerous countries.

Mr. Chavez holds a double-digit lead over Mr. Capriles in many local polls, but one major pollster, Datanalisis, recently declared more than a fifth of Venezuelans undecided. Analysts say this election is Mr. Chavez's toughest contest yet since coming to office in 1999.

Mr. Chavez and his supporters frequently insist that Mr. Capriles aims to privatize state oil monopoly Petroleos de Venezuela, or PdVSA, despite the opposition candidate's frequent statements saying that the company should remain in government hands.

On Monday, a program on Venezuelan state television dedicated to poking fun at the opposition called "What are they up to?" showed a short animated segment of a sinister-looking Mr. Capriles digging up the Orinoco heavy oil belt, the region with most of Venezuela's reserves, and ramming it into a mailbox bearing the seal of the U.S. State Department.

PdVSA, which has been used as a virtual ATM by Mr. Chavez to finance large social programs, has faced cash flow problems and a rising debt load in recent years. That has weighed on how much the company has been able to reinvest into the sector. Lofty goals for raising crude production set by Mr. Chavez, in the meantime, have also not been met, critics say.

Mr. Capriles noted an initiative launched by the president in 2005 which should have brought production to 5.8 million barrels a day by this year, though Venezuela continues producing around 3 million daily.

Included in PdVSA's bloated list of expenditures is a near tripling of its work force to more than 100,000 workers over the last decade.

Mr. Capriles promised that "not a single worker has to worry about their job," before adding: "The only person that should worry about his job is [Oil Minister and PdVSA chief] Rafael Ramirez."

Copyright (c) 2012 Dow Jones & Company, Inc.

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