Bill Totten's Weblog

Wednesday, April 05, 2006

The New World Oil Order

Hugo Chavez Tells BBC, We Have More Oil Than Saudi Arabia

by Greg Palast

reporting for BBC Newsnight TV (April 03 2006)

In an exclusive interview with GREG PALAST, Hugo Chavez declares a new oil order.

Venezuela officially demands OPEC recognize his nation's reserves as largest.

Tonight, BBC Newsnight will kick off its Latin America Week Special with Palast's exclusive report from Venezuela.

You can watch the BBC Newsnight Report live at 5.30 pm EST at Newsnight's website:

(The report will remain viewable for 24 hours).

Read below about BBC Newsnight revelations ...


BBC Newsnight (April 03 2006)

If you thought high oil prices were just a blip think again. In an exclusive interview with Greg Palast for BBC Newsnight the Venezuelan President Hugo Chavez has ruled out any return to the era of cheap oil.

The colourful Venezuelan leader hosts the OPEC meeting on June 1 in Caracas and he will ask OPEC to set $50 a barrel - the average price last year - as the long term level. During the 1990s the price of oil had hovered around the $20 mark falling as low as $10 a barrel in early 1999.

Chavez told Newsnight "we're trying to find an equilibrium. The price of oil could remain at the low level of $50. That's a fair price it's not a high price." Hugo Chavez will have added clout at this OPEC meeting.

US Department of Energy analyses seen by Newsnight show that at $50 a barrel Venezuela - not Saudi Arabia - will have the biggest oil reserves in OPEC. Venezuela has vast deposits of extra heavy oil in the Orinoco. Traditionally these have not been counted because at $20 a barrel they were too expensive to exploit - but at $50 a barrel melting them into liquid petroleum becomes extremely profitable.

The US DoE report shows that at today's prices Venezuela's oil reserves are bigger than those of the entire Middle East including Saudi Arabia, the Gulf states, Iran and Iraq. The US DoE also identifies Canada as another future oil superpower. Venezuela's deposits alone could extend the oil age for another 100 years.

The US DoE estimates that Chavez controls 1.3 trillion barrels of oil - more than the entire declared oil reserves of the rest of the planet. Hugo Chavez told Newsnight's Greg Palast that "Venezuela has the largest oil reserves in the world. In the future Venezuela won't have any more oil - but that's in the 22nd century. Venezuela has oil for 200 years." Chavez will ask the OPEC meeting in June to formally accept that Venezuela's reserves are now bigger than Saudi Arabia's.

Chavez's increased muscle will not go down well in Washington. In 2002 the Bush administration welcomed an attempted coup against Chavez. He told Newsnight that the Americans had organised it in an attempt to get hold of Venezuela's oil.

Ironically by invading Iraq George Bush has boosted oil prices and effectively transferred billions of dollars from American consumers to Chavez. Up to $200 million a day - half of it from the US - is flooding into Caracas. Chavez is spending this on building infrastructure and increasing the minimum wage and improving health and education in the poor ranchos which surround the cities. As a result even his opponents accept that Chavez is extremely popular and will easily win the next Presidential election in December.

Chavez is also spending billions in the rest of Latin America - exchanging contracts for oil tankers and infrastructure projects and buying up loans in Argentina and Brazil. He has made cheap oil deals with Ecuador and the Caribbean.

He has also spent some of the dollars which have come in from the US supporting Fidel Castro in Cuba. In return Cuba has supplied the thousands of doctors and teachers who are transforming conditions in the barrios of Caracas. Washington accuses Chavez of buying influence in Latin America.

The Newsnight team had to endure the long speeches and marathon six hour TV shows which Hugo Chavez delights in. Chavez posed for Newsnight posing with the sword of Simon Bolivar the 18th century liberator who drove out Spanish imperialists from South America. The symbolism was clear but behind the showman is a clever political brain.

Chavez has not invaded any foreign countries. He does not have secret prisons at home or abroad. Chavez has repeatedly won democratic elections and the opposition operates freely although some members have been charged with accepting illegal foreign donations. Nonetheless George Bush's administration repeatedly targets Chavez on human rights and finances his opponents.

Earlier this year US Defense Secretary Donald Rumsfeld compared Chavez to Hitler - because he was elected democratically - and last year the influential American evangelist Pat Robertson called for his assassination. Robertson later apologized and said that he did not "necessarily" have to be killed so long as he was kidnapped by American special forces.

Chavez told Newsnight that he was still concerned that George Bush had not learnt the lessons of Iraq and would order an invasion to try to secure Venezuela's oil. "I pray this will not happen because US soldiers will bite the dust and so will we, Venezuelans". He warned that any such attempt would lead to a prolonged guerilla war and an end to oil production. "The US people should know there will be no oil for anyone".

Chavez does not accept Tony Blair's criticism of him for lining up with Fidel Castro. He told Newsnight "if someone is sleeping together it is Bush and Blair. They share the same bed."

Also see The Guardian story about the report:,,1745467,00.html

Read, "The Assassination of Hugo Chavez", in Greg Palast's new book, Armed Madhouse: Dinspatches from the Front Lines of the Class War to be released by Penguin Dutton June 6 (US) and July 7 (UK).

Pre-order it today or donate to Palast Investigative Fund for a personally signed copy at:

View Palast's investigative reports for Harper's Magazine and BBC Television's Newsnight at

Special thanks to Matt Pascarella, Leni von Eckardt, and Richard Rowley for their research and production assistance on this report.

Bill Totten


  • If what President Chavez says is true, that Venezuela possesses enough oil to last us 200 years (although that oil is going to be more expensive due to the fact that it is harder to extract), then what happens to the proponents of the peak oil theory? They were wrong? They were doomsayers?


    By Blogger George Dargus, at 1:24 AM, April 09, 2006  

  • Thanks, George. As you point out, the stuff President Chavez wants to count will be much more expensive to extract. And much more expensive to process into useable fuel and other products. And extracting, processing and using it may be much harder on the environment than the already-harmful fossil products we're using today. So I don't think what he says, even if completely true, undermines the peak oil theory or its proponents. Bill

    By Blogger Bill Totten, at 4:09 PM, April 11, 2006  

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