Multi-Polarity and Oil: Venezuela

I've spent the last few columns lamenting the fates of Africans whom don't seem to register on the radars of any country that matters. However, if you have oil, that's your ticket to ride. If you have oil, you have a large bargaining chip. Oil is why we've allowed Saudi Arabia to get away with murder (figuratively and literally). Oil is one of two ways (the other being nuclear arms) to become a player on the world stage.

Since the collapse of the Soviet Union the US has enjoyed some degree of hegemony unrivaled by any country in the world. For reasons too complex for me to get into now, the US has given away a large part of its leverage while at the same time, a renewed, energized and firmly connected world seeks to change the shape of the board the US has been playing on. The European Union seeks to assert itself as the opposition party to US influence in the world at large. Iran and the Saudi Wahabbists seek to drive the US and probably the entire Western world from the Middle East entirely. Russia is grasping ever so tightly to its influence in former Soviet Republics including Central Asia. China seeks to be master of its South East Asian domain and is being tested by the recent North Korean nuclear crisis. All of this in the face of a US administration that is being dragged kicking and screaming into a world that has at once become too small to ignore and too big to control on its own.

This brings me to South America. We often forget about South America because since l90l, we've been employing President Roosevelt's "Big Stick" policy in South America. "Big Stick" comes from an African proverb "speak softly but carry a big stick and you will go far". The expression was initially used to describe Roosevelt's intervention in the Dominican Republic in l905. It didn't end in DR however and to varying degrees in continues today. The "Big Stick" was used most often during the Reagan years to combat the rise of Marxism/Soviet Communism in Latin America. And that brings me to Venezuela.

It is obvious to me that as the prevailing wisdom among the uneducated liberal masses is that there must be peace at all costs; world leaders are seeing a window of opportunity to flex their muscles and challenge US hegemony. President Chavez of Venezuela can't possibly be serious in thinking the US is going to initiate a land invasion of his country. He and his buddy Fidel Castro would have to be equally insane to think we're going to attack Cuba. First off, we had a mandate to go in and depose Saddam Hussein and the world went into apoplexy. Whatever capital we’ve got in the world community right now is not going to be spent on any Latin American country. We’ve got bigger, more pressing issues to contend with in Iran. I believe Chavez knows this and the situation makes for the perfect foil for him to declare independence from US influence.

It’s a pretty good strategy if you think about. Having taken a lesson from North Korea, if you act crazy enough the US will attempt to deal with you. Upon further Google research I found two articles that led to me believe that much of the rhetoric coming out of Caracas is mere posturing in the face of United States that, much like Bilbo Baggins from Fellowship of the Ring, is, “spread thin like butter over too much bread.” Chavez looks like the “big man” of Latin America and the US can’t do much about it because their focus is elsewhere.

To go back to my original statement about oil being the pumpkin coach that brings a country to the First World ball, there are two articles, as stated above, that seem to indicate Venezuela attempting to play the US against Russia.

From Forbes.com: Venezuela OKs Corocoro Oil Field Plan – “Venezuela has approved a plan for U.S. oil firm ConocoPhillips to develop the Corocoro oil field in eastern Venezuela, the state oil company Petroleos de Venezuela S.A. said Saturday.

The plan was approved after ConocoPhillips president James Mulva met with Venezuelan President Hugo Chavez on Friday. The state oil company announced the agreement on its Web site Saturday.

ConocoPhillips planned to start drilling 14 wells at the site in December, but Venezuela put the project on hold amid a dispute over the company's business plan. The field, discovered by Conoco in 1999 and declared commercial in 2002, is a key component of Venezuela's plans to expand oil output.

The plan foresees 75,000 barrels a day in output by 2007, and 120,000 barrels a day by 2009.

"We are going to continue with this project. We are very pleased by the progress recorded by our investments in Venezuela," Mulva said, according to the statement posted on the PDVSA site.”

One story has Venezuela gearing up for an imminent attack and threatening to cut off the oil sales (see Saturday’s post) and yet another has us doing business in those same coveted oil fields.

Meanwhile, over in Russia as per Itarr-Tass News Agency: Venezuela interested in cooperation with Russia's LUKoil – “CARACAS, February 11 (Itar-Tass) - Venezuela is prepared to develop relations with Russia's LUKoil company, its President Vagit Alekperov told Tass on Thursday.

Venezuela expressed interest in contacts with the Russian company at a meeting Alekperov had with Venezuelan Oil Minister Rafael Ramires. Both sides expressed confidence that the two companies might discuss concrete contacts this year already, Alekperov said.

Venezuela has unique oil and gas deposits, and therefore, it is of interest to all world oil companies, Alekperov said. The Russian company is interested in oil development in the area of the Orinoco River and the Gulf of Venezuela where tenders are expected in the near future, Alekperov said.

A Memorandum on understanding between LUKoil and the Petroleos de Venezuela companies was signed in November 2004 when Venezuelan President Hugo Chavez paid a visit to Moscow.”

This is the behavior of a country that is attempting to position itself as regional leader. Venezuela is using oil the way North Korea is attempting to use nuclear missiles, with the end result being high recognition and place on the world stage. In short, Venezuela is attempting to break the “Big Stick” of the US forever more.

We shall see how this all develops as time goes on. After all, Venezuela has neighbors such as Brazil and Columbia and they’re not so anxious to tell the US what to do with itself nor are they so anxious to embrace Castro as Chavez has.