Who Owns Venezuelan Oil - with Marina Hernandez

Latin America Correspondent speaks to Venezuelan journalist Marina Hernandez about the ongoing suggestion that Venezuelan oil actually belongs to the United States. 

Transcript

Jon Bonfiglio 0:00

Hi everyone, welcome back to Latin America Correspondent, where today I'm joined by Venezuelan journalist Marina Hernandez, a regular and highly valued voice on the podcast. Hi, Marina.

Marina Hernandez 0:11

Hi, Jon. Thank you for having me.

Jon Bonfiglio 0:14

Always great to have you and your voice and your perspectives involved. Marina, a few weeks ago we spoke about uh Venezuelan oil, of course, and we trailed the fact that we wanted to speak about this um this purported ownership. Who owns Venezuelan oil? I mean the clue is kind of in the name, but let's work let's work our way through it anyway. Uh the attention, of course, is away from Venezuela at the moment. Um, but yeah, this notion propagated by Donald Trump as it and his administration of Venezuelan oil is in fact American oil, has been one of the justifications for the uh the entry into Venezuela and the the um the blockade, the the embargo, if you like, and the taking over of the Venezuelan oil industry. So today is the day, finally, when we when we discuss these ideas. Where should we start? Where would you like to start?

Marina Hernandez 1:02

Well, I think it's good to do kind of like uh quick uh go back to history and and kind of tell the history of of oil in Venezuela so everyone can understand where this claim comes from. So Venezuelan oil was uh nationalized in the 70s by Carlos Andes Pérez, which was a president at the time. Um there were in fact many American companies working the oil on Venezuelan soil, but uh when Carlos Andes Pérez decided to nationalize the oil, uh those companies were paid back, and uh there was uh an agreement made where basically the state of of Venezuela would also take part and and would receive some money from uh the the oil that was commercialized by these companies.

Jon Bonfiglio 1:56

Yeah, and so just to just to sorry to interrupt, just to clarify that so that these companies didn't own Venezuelan oil, they had concessions to be able to extract and sell Venezuelan oil, and when Venezuelan oil was nationalized, then they were paid compensation for the end of those contracts.

Marina Hernandez 2:15

Yeah, I mean, many of them actually didn't didn't end in even the contract, they continue to to work inside of Venezuela with the new the new law. I mean, not not all of them leave the country, but the big the big turnaround uh happened when Chavez took power. He changed the legislation of oil around 2007. Um in that moment, the Orion Covel was controlled by joint ventures between PDVSA, which is the the national oil company, and foreign companies. So the joint ventures that were starting under Chavez and the Oil Bill have all maintained a meaning level of 60% ownership PDVSA, meaning that uh PDVSA owns 60% of that of that company, and then the rest is for the American companies. Um previous companies that work that were working in Venezuela before that uh agreement own a majority stake, and this was changed by the the Chavez legislation. So these companies involve very known ones like ExxonMobiles, Chevron, Philips, MVP, they all transformed so that PDVSA will have a minimum of 60%. The claim that these companies do is that they were they were not rewarded properly when this legislation changed. So what they did was go to the international law, basically, and uh just ask for money from the Venezuelan state. Um, so there's a litigation there between the Venezuelan state and this company that's still going, it's still taking place today as we speak. Um, but that is basically what Donald Trump, Donald Trump's argument to say that the Venezuelan oil belongs to this company, which is absolutely fake because so as you can see, this is so being working international law and has nothing to do with the actual ownership of natural resources of a land that of course belong to the people in that land. I mean, that's it's incredible that we have to justify that in that in that point of history. But yeah, definitely every natural resource is inside a country, even if soil or gold or whatever, belongs to that country. Um, so the claim from Donald Trump makes reference to something that is being worked on international law and uh refers to a change of law that Chavez did in 2007 and has nothing to do with the actual ownership of the oil. We could, of course, agree if that agreement was or or wasn't good for the Venezuelan people, or if it was done in a fair agreement, or if this company actually deserves compensation or not. That that I believe is a is a separate discussion. Uh but what is in stake here is that the United States owns nothing beyond their own land. So they basically own the oil in their land and no other in no other land. I think it's very important to say that.

Jon Bonfiglio 5:12

Yeah. Um of course we we live pretty clearly now in a context in which there is resource imperialism is at stake, uh, um, by the US in particular. We're gonna be hearing a lot more that resources do not belong not just to Venezuela, but um to other countries across the the region. And very soon, I suspect, I mean it's already been intimated, but very soon we're gonna be hearing that uh Venezuelan resources need to be extracted in order to pay the US uh to compensate for the US, the United States, for the work that they've been doing to liberate the in the Venezuelan people in in inverted commerce. My understanding specifically about, I mean, and again, just as an underscore, um as regards any kind of justification to argue that Venezuelan oil does not belong to Venezuela, is sort of living in cloud cuckoo land in a sort of parallel reality. If you were to give the benefit of the doubt to any aspect of that argument, my understanding is that it specifically relates, as you say, Marina, to the 2007 Chavez increasing um uh sort of of state control over the oil industry, and specifically to one company, Conoco Phillips, an American company, that was uh designated by the WTO, the World Trade Organization, to be paid compensation in the region of $8 billion. And it's that specifically, which is uh currently outstanding, and the Venezuelan state has argued, uh, well, specifically, of course, Chavez and then Maduro argued that because the oil industry was inactive in Venezuela or low-producing, that they could not pay that back. But again, that is um a uh a fraction of um a much broader argument, which says and will continue to say that um everything in Venezuela does not belong to Venezuela and must be sold for the good of the Venezuelan people. Um, because of course that's the way that the arrow is is pointing.

Marina Hernandez 7:16

Things change after January 3rd, as we all know. So I will not refer how is the current state of situation right now. So basically, the law was changed. This 2007 law I was referring to before changed in a very uh rapid manner by the National Assembly in Venezuela. And this law allows the company to operate in Venezuela even if they own ammonia stakes. So basically, before we had that Venezuelan uh state oil company has to own uh uh 60% of the stake uh of that uh foreign company, and now that is changed, and companies can work there even if the the PDVSA, which is the national um oil company, owns ammonia stake. The US also relieves sanctions and allow some US oil companies that were working before to operate by within Venezuela. So that permit requires that any contract be bound by the US jurisdiction, basically. So we have uh U.S. jurisdiction dictating the terms in which Venezuelan oil is extractor. Justin Rodriguez also met with the Ministry of Energy, Chris Wright in Venezuela. And she said that uh Venezuela and the United States are working, cooperating towards uh creating uh benefit from the two people that they have been partners forever. So this is very, I mean, it's very worth mentioning because this was the same person that talked about uh anti-imperialism and and um had a posture against the United States in his his whole career, basically, does he really use uh the vice president? So now she's changed her entire argument in a matter of months, and that's that's something that it's it's it's striking. I mean, it's it's it's it's very impressive to watch. So the Secretary of Energy, of course, projected to increase Chevron's production and uh just bring benefit to the people, and that money, because there had been already some uh money from the Venezuelan oil that has happened since January 3rd, is actually being paid in uh bank accounts in Qatar. Because the United States doesn't want these companies uh that we mentioned before that uh have a debt with Venezuela to have uh a right to basically own that assets if they go through the United States. So this they are paid by this third party, supposedly neutral, and then the money is released to the Venezuelan states under the US supervision, and of course, making sure that Venezuela and the Venezuelan dictatorship agrees uh with what the United States is saying. So this is a very weird combination right now because we have the United States dictating the terms in which Venezuelan oil is uh extracted. Then we have Venezuela basically agreeing to that and just uh being contradictory to the entire argument of the same government for the past 20 years, and then we have Qatar, a third party, receiving the money in the in its bank account. So it's very weird.

Jon Bonfiglio 10:15

Yes, um it is weird. We live in unusual times, but uh underscoring it all, I think is clearly the fact that what we're seeing take place with Venezuela at the moment is that sovereignty is not sovereignty, that it is um it is uh being positioned as a country that is there to be in service of another country, a more powerful um uh country. And of course, oil is uh is absolutely at the center of this. But I think the fact that we are even discussing these uh pretty clear-cut questions as to what sovereignty means tells you that we we live in strange times. Uh Marina, as always, uh thanks so much for taking the time to join us to discuss this. I'd like to say that it's clear now that Venezuelan oil is Venezuelan, but of course, you know, we live in a post truth world. So I guess you can take from it what you will. Look forward to talking again too, Marina. Thank you so much.

Marina Hernandez 11:12

Thank you.