Monday, April 03, 2006

THE NEW WORLD OIL ORDER: Hugo Chavez Tells BBC, We Have More Oil Than Saudi Arabia

Greg Palast Reporting for BBC Newsnight TV
Monday, April 3, 2006

In an exclusive interview with GREG PALAST, Hugo Chávez declares a new oil

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

(The report will remain viewable for 24 hours).

Read below about BBC Newsnight revelations ...

BBC Newsnight
Monday April 3, 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

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

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

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: Dispatches 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.