US embassy cable - 04CARACAS851

C O N F I D E N T I A L CARACAS 000851 
 
SIPDIS 
 
 
NSC FOR TSHANNON AND CBARTON 
ENERGY FOR DPHUMPHREY AND ALOCKWOOD 
 
E.O. 12958: DECL: 03/09/2014 
TAGS: EPET, PREL, ECON, VE 
SUBJECT: IN GAS CEREMONY CHAVEZ SOUNDS A LESS AGGRESSIVE 
NOTE TOWARDS U.S. 
 
REF: CARACAS 708 
 
Classified By: AMB. CHARLES S. SHAPIRO, FOR REASONS 1.4 (b) and (d) 
 
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SUMMARY 
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1. (C) President Chavez pointedly lowered his anti-U.S. 
rhetoric in a March 9 ceremony hurriedly organized by the GOV 
to recognize the award to ChevronTexaco (CTX) of an 
exploration license for an off-shore natural gas block. 
While agreeing that Chavez had sought to send a message to 
the USG, senior CTX executives felt it likely that the larger 
message was aimed at calming the markets, and particularly 
would-be investors.  We believe Chavez is seeking to adopt a 
strategy from his mentor Fidel Castro and will attempt to use 
the petroleum industry to try to influence U.S. policy 
towards Venezuela.  End Summary. 
 
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CHEVRONTEXACO EVENT PROVIDES A VEHICLE 
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2. (SBU) As reported reftel, on February 19 the GOV announced 
the award of Block 3 of the off-shore Deltana Platform 
natural gas project to ChevronTexaco (CTX), the sole bidder 
on the block.  CTX Latin America President Ali Moshiri 
contacted the Ambassador late on March 5 with the news that 
the GOV had contacted him to say the license would be granted 
in a ceremony at Miraflores Palace on March 8.  Econoff 
ultimately attended the ceremony representing the Ambassador. 
 
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ATMOSPHERICS 
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3. (C) While it is normal for the Minister of Energy and 
Mines and PDVSA President Ali Rodriguez to attend such 
events, a panoply of other senior GOV officals attended. 
Virtually the entire economic cabinet was there (Ministers of 
Finance, Production and Commerce, and Planning and 
Development) as well as Foreign Minister Jesus Perez and Vice 
President Jose Vicente Rangel.  Ali Rodriguez was accompanied 
by numerous senior PDVSA officials (including CITGO President 
Luis Marin who reportedly had met with President Chavez upon 
his arrival in Venezuela the day before).  (Note:  So many, 
in fact, that econoff believed Chavez would make a 
long-expected announcement about changes in PDVSA's Board in 
his speech.) 
 
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THE SPEECH 
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4. (C) Chavez spoke for about an hour in a speech broadcast 
by GOV mandate nationally on all radio and television 
channels.  In an early reference to CTX, he said pointedly 
"we recognize ..the presence of these brothers from the U.S. 
who come not to attack us nor to show a lack of respect, but 
come to unite with us..."  Leading with,"our relationship 
with the U.S. is historic and profound," Chavez then launched 
into a lengthy discourse on the role of Venezuelan 
independence leader Francisco de Miranda in the U.S. War of 
Independence.  He also spoke of Presidents Roosevelt and 
Kennedy, the Marshall Plan and Alliance for Progress, and 
noted that Roosevelt, had be lived now, would have been 
accused of being a "chavista."  Chavez also comparied 
President Kennedy and Senator John Kerry.  He underlined that 
Venezuela has been a stable supplier of oil to the U.S. 
during the five years of his presidency, except for two 
occasions in April and December 2002 when supply disruptions 
had been caused by his opposition.  Chavez pointed to the 
overall importance of the U.S. as a commercial partner to 
Venezuela and finally ended with a reference to Walt 
Whitman's "Leaves of Grass." 
 
5. (C) In his one off-message moment, Chavez slipped in a 
reference to the capital of Trinidad and Tobago as Port of 
Prince.  After an aide handed him a note, he apologized to 
the Trinidadian Ambassador who was present in the audience 
 
 
and corrected himself, saying he had been thinking about Port 
of Prince a great deal recently and that "part of his soul" 
was there. 
 
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CTX'S TAKE 
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6. (C) In a subsequent meeting with the Ambassador, Ali 
Moshiri, accompanied by Alan Kleiman, Vice President for 
Exploration and Production of ChevronTexaco International, 
agreed that the ceremony had been arranged with suspicious 
speed.  He added that the award of an exploration block 
hardly merits such treatment -- and particularly a block for 
which CTX had only made a $5 million bonus bid.  The CTX 
executives laughed over the impression Chavez had created in 
his speech that CTX had won the block in competition against 
15 other bidders rather than being the sole bidder.  They 
agreed the GOV had staged the event to provide a 
counterbalance to Chavez's harsh comments about cutting off 
oil sales to the U.S. the week before.  But, while agreeing 
that Chavez sought to send a message to the USG, Moshiri felt 
it likely that the larger message was aimed at calming the 
markets, and particularly would-be investors.  Moshiri added 
that, if there had been another non-U.S. bidder, the GOV 
would have found some way to award the block to that bidder 
and reiterated his belief (reported reftel) that Minister of 
Energy and Mines Ramirez_ and PDVSA President Ali Rodriguez 
had worked hard to convince Chavez to award the block to a 
U.S. company. 
 
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COMMENT 
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7. (C) It is clear that Chavez had deliberatedly sought a 
venue in which he could pitch a different message to U.S. 
majors after his threats to cut off oil supplies the week 
before which were coupled with vulgar abuse of President 
Bush.  We believe Chavez is seeking to adopt a strategy from 
his mentor Fidel Castro.  Just as Fidel has tried to use 
potential food sales to Cuba to turn U.S. agribusinesses into 
lobbyists for him, we believe Chavez may attempt to use 
energy companies to shield him from U.S. political criticism. 
 Ultimately, Chavez believes that oil is all that matters to 
the U.S. in Venezuela and that, so long as the oil flows 
uninterrupted, we should leave him alone. 
 
8. (C) We expect Chavez quickly to resume his U.S. bashing. 
SHAPIRO 
 
 
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      2004CARACA00851 - CONFIDENTIAL