Hugo Chavez Could Order Army to Run PDVSA

Venezuelan President Hugo Chavez said on Sunday he would order the armed forces to take over PDVSA if protesting executives and employees tried to halt the company's operations through a strike action. For three weeks, staff members have staged a campaign of public demonstrations, administrative stoppages and work slowdowns protesting government-ordered management changes. "If they halt the company, I will militarize it," Chavez said during his weekly "Hello President" radio and television program. "I'm not going to let them halt PDVSA... I have the plan ready," he added.

Chavez's words were the toughest warning yet to the dissident PDVSA staff, who are demanding the resignation of five board members appointed by the president. The revolt inside PDVSA is a major headache for the left-leaning populist president who is already facing mounting internal opposition to his 3-year-old rule and the threat of an anti-government general strike from the country's largest union grouping, the CTV.

The PDVSA dissidents argue the new board directors' appointments were based on political loyalty to the president and his self-proclaimed "revolution," and not on professional merit. They are seeking the nomination of a new PDVSA board. The protesting oil company executives and employees have insisted they do not want to call an all-out strike in the company, which could cripple Venezuela's oil-reliant economy and petroleum shipments by the world's No. 4 oil exporter.

But the government's refusal to budge over the contested board appointments has left little room for maneuver in the dispute, the first of its kind by senior executives of the state oil giant since it was formed in 1975.

Chavez said he was ready if necessary to sign an emergency decree to intervene in PDVSA and "throw out of there all those who don't want to be there. I don't accept any questioning of decisions which I am authorized and invested by the law to take," the tough-talking president said. Despite the continuing dispute, vital PDVSA operations such as oil production, refining and petroleum sales have remained so far unaffected by the slowdown protest actions.

PDVSA exports more than 2 million barrels per day (bpd) of crude and refined products, primarily to the United States. The sales fund between a third and one-half of government revenues. "This is a state company, not a private company... they are not going to halt it either today, tomorrow or ever," Chavez said.

The revolt by senior managers and office staff in PDVSA has received backing from the main national oil workers' union, Fedepetrol, and by the CTV (Venezuela's Workers' Confederation), which has threatened to call a national strike to protest the Chavez government's policies. Although the protesting oil firm employees have so far avoided strike action that could disrupt oil production and exports, they have warned management that prolonged slowdown actions could eventually cause delays to these activities.

They have also vowed to escalate their protests if any of their number are fired. The government has said it is studying possible dismissal procedures against some of the ringleaders of the PDVSA revolt.