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Venezuelan Oil Monopoly Fires 7 Execs

Latin America: Country's president says any others who protest company leadership also will go.

April 08, 2002|From Associated Press

CARACAS, Venezuela — President Hugo Chavez said seven executives who led monthlong strikes and protests against government-appointed leadership at the state-owned oil monopoly were fired by the company's board of directors over the weekend.

Twelve other Petroleos de Venezuela executives have been sent into early retirement, he said Sunday, adding that any other employees who continue leading protests will be fired.

The decision is likely to exacerbate a conflict that has affected production at South America's largest state-owned oil company. The Confederation of Venezuelan Workers, the country's biggest labor union, said the government had "committed suicide" by announcing the dismissals.

A five-week-long labor slowdown has forced operators to scale back production at the 950,000-barrels-a-day Paraguana refinery complex in western Venezuela, company sources said Sunday. The sources, speaking on condition of anonymity, said they couldn't say by how much production had been trimmed.

The Paraguana complex produces 70% of Venezuela's refined products. The production slowdown was part of a plan to prevent accidents because of the reduction in the flow of gas and oil.

Confederation President Carlos Ortega said the union may extend a one-day nationwide general strike called for Tuesday.

Fedecamaras, the country's largest business association, announced Sunday that its members would join the general strike Tuesday. It will be the second time in Chavez's 3-year-old presidency that unionized workers and business leaders will have joined forces to paralyze the country.

Undeterred by the firings, company employees staged a noisy protest outside the Caracas headquarters, chanting "Not one step back" and banging pots and pans.

"We are prepared to respond to these decisions. We will take the necessary measures," said Petroleos de Venezuela's director of finance, Juan Fernandez, one of the executives who was fired. Also fired were Horacio Medina, Eddy Ramirez, Gonzalo Feijoo, Alfredo Gomez, Carmen Elisa Hernandez and Edgar Quijano.

In his weekly radio broadcast Sunday, Chavez said the government had been more than patient. Chavez accused the protesters of trying to "sabotage" Venezuela's oil industry and vowed that his efforts to reform the company would continue.

Two of five main export terminals for crude oil and refined products--El Palito in central Venezuela and Puerto La Cruz in the east--shut down because of labor unrest. At least a dozen vessels were waiting at the ports for operations to resume.

Chavez also announced a 20% increase in the public sector minimum wage, to take effect in May. About 40% of Venezuelan workers earn the current minimum wage of $180 per month.

Petroleos de Venezuela, also known as PDVSA, oversees the country's greatest resource--crude oil reserves that are the largest outside the Middle East.

Oil provides a third of the nation's $110-billion gross domestic product, 80% of its export earnings and half of government income.

The company's holdings include a majority stake in the Western Hemisphere's largest refinery as well as Citgo Petroleum Corp.'s gasoline stations.

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