[PolEconAnalysis.org's Paul Kellog argues that ExxonMobil isn't suing PDVSA because it needs the money. The world's largest publicly traded corporation recorded profits of $40.6-billion (U.S.) in 2007, up three per cent from 2006's record of $39.6-billion. The truth is, ExxonMobil's ultimatum has more to do with politics than economics.]
Venezuela: the spectre of Big Oil
"Never again will they rob us – the ExxonMobil bandits. They are
imperial, American bandits, white-collared thieves. They turn
governments corrupt, they oust governments. They supported the invasion
of Iraq."[1] This was the response from Venezuelan president Hugo
Chávez to the successful lawsuit by the world's biggest corporation
(ExxonMobil), freezing $12 billion in assets of Venezuela's state-owned
oil company, PDVSA – a serious escalation in Big Oil's long running
dispute with Chávez and the movement he represents.
ExxonMobil
isn't suing PDVSA because it needs the money. The world's largest
publicly traded corporation recorded profits of $40.6-billion (U.S.) in
2007, up three per cent from 2006's record of $39.6-billion. "If Exxon
were a country, its 2007 profit would exceed output of two-thirds of
the world's nations. Its 2007 revenue of $404-billion (U.S.) would
place it among the 30 largest countries, ahead of such middle powers as
Sweden and Venezuela."[2]
ExxonMobil claims it is suing PDVSA
because of a June 2007 deadline given by Chávez to Exxon and other Big
Oil corporations operating in Venezuela, demanding they cede majority
control in their heavy-crude upgrading projects in the country.
ExxonMobil and ConocoPhillips filed arbitration requests with the
International Center for Settlement of Investment Disputes, and
ExxonMobil simultaneously took legal action in courts in the U.S. and
Britain, which on February 7 agreed with their claim, and ordered the
freeze of PDVSA assets.[3]
But there is much more at stake than
a simple legal disagreement. First – many other Big Oil companies have
agreed to Chávez' terms and not gone to court – among them, Chevron
Corp., Norway's Statoil ASA, Britain's BP PLC and France's Total SA.[4]
Second, Venezuela is not the only country to confront Big Oil and
demand that old contracts be renegotiated. Here in Canada,
Newfoundland's Danny Williams demanded and won an ownership share in
the multi-billion-dollar Hebron offshore oil deal.[5] Even the Tories
in Alberta are forcing Big Oil to pay higher royalties.[6] And in
Russia, "both BP PLC and Royal Dutch Shell PLC have ceded control in
big, lucrative Siberian projects to Russian gas monopoly OAO
Gazprom."[7]
The truth is, ExxonMobil's ultimatum has more to do
with politics than economics. Russia's ruler Vladimir Putin holds
office because of his ties to the secret service, his crackdown on
public debate, and his commitment to pushing Russia back into the world
of Big Power politics. That world of corruption and repression is
comforting and familiar to the owners of ExxonMobil. Chávez, by
contrast, holds office because millions have again and again been
willing to put their bodies on the line against multinational
corporations and their local allies. That revolutionary movement is
terrifying to ExxonMobil.
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