US embassy cable - 04CARACAS2564

C O N F I D E N T I A L  CARACAS 002564 
 
SIPDIS 
 
 
NSC FOR TSHANNON AND CBARTON 
ENERGY FOR DPUMPHREY AND ALOCKWOOD 
 
E.O. 12958: DECL: 08/08/2014 
TAGS: ENRG, PGOV, VE 
SUBJECT: CHAVEZ CHARMING THE OIL SECTOR 
 
 
Classified By: Economic Counselor Richard Sanders; for reasons 1.4 (b) 
and (d) 
 
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SUMMARY 
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1. (C) An August 6 ceremony to mark the opening of drilling 
by ChevronTexaco in the off-shore Deltana Platform natural 
gas project provided President Chavez with an opportunity to 
posture for the nation and to send a message to the United 
States.  Chavez publicly tasked Ali Moshiri, ChevronTexaco 
Vice President for Latin America Upstream, to take the 
message to the people and government of the U.S. that 
"although they do not understand us well, we are your 
friends."  The ceremony, broadcast by presidential order on 
all/all television and radio stations, capped a round of 
meetings between Chavez and the business sector, including 
the oil sector.  Chavez also announced that the GOV would 
soon open a bid round on additional off-shore exploration 
blocks.  While ExxonMobil has resisted pressure to sign a 
project document in a similar public ceremony (see septel), 
the GOV has succeeded in using the energy sector to create a 
sense of momentum in the run up to August 15.  However, 
Chavez's message of friendship for the U.S. subsequently 
slipped when, in front of a gathering of the faithful, he 
once again returned to the theme of cutting off oil sales to 
the U.S. in the face of supposed U.S. aggression.  End 
Summary. 
 
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THE CEREMONY 
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2. (U) On August 6, econoff attended a ceremony at Miraflores 
Palace marking the launch of the first exploratory well in 
the off-shore Deltana Platform natural gas project (see 
septel for details about the project).  The ceremony, carried 
by presidential mandate on all/all of the country's radio and 
television stations, featured Chavez talking by satellite 
hookup to Vice Minister of Hydrocarbons Luis Vierma and 
Venezuelan members of the drilling crew on the drill 
platform.  In their remarks both Chavez and Vice Minister 
Vierma emphasized that the administration is not "giving 
away" Venezuela's natural resources (a charge this government 
has frequently lodged against the governments of the 1990's 
that sponsored projects mounted by international oil 
companies) and underlined the employment benefits that will 
flow from the new gas project as well as other social 
development projects underway in Sucre and Delta Amacuro 
states. 
 
3. (U) In addition to hailing the launch of drilling in Block 
2 of the Deltana Platform, Chavez formally awarded the 
exploration license for Block 3 to ChevronTexaco.  He also 
announced that the GOV would soon open a bid round on 10 
off-shore exploration blocks off Falcon state and in the Gulf 
of Venezuela. 
 
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THE MESSAGE 
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4. (U) At the end of the ceremony, President Chavez directed 
ChevronTexaco Vice President Ali Moshiri to take the message 
to the people and government of the U.S. that "although they 
do not understand us well, we are your friends."  Continuing 
with his remarks Chavez said, "Because there are elections in 
November, if President Bush is re-elected, we hope that those 
who advise him will reflect, because we don't understand why 
a country like this, a strategic ally and partner, has been 
subjected to the pressure, and to much more than pressure, 
that we have received from Washington, putting the stability 
of the country in danger."  If Kerry is elected, said Chavez, 
he looked forward to "starting ... frank, sincere, 
cooperative relations between the two governments...." 
 
5. (U) Chavez contrasted how things might be, noting that, 
"if we can do this business...despite the terrible weight of 
the permanent problems in the relationship between the two 
governments ) not because we want it, we have done nothing 
to damage the relationship.  The offenses...have come from 
 
there, because I think they are not well informed about what 
it happening here."  Chavez ended by saying that he offered 
his remarks "with respect but with frankness," and repeating 
a line he frequently uses, "we are the brothers of the people 
of Walt Whitman, Abraham Lincoln...." 
 
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OUTREACH TO BUSINESS 
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6. (U) The ceremony capped a round of weekly meetings between 
Chavez and the business sector that have been held in 
Maracaibo, Valencia, Caracas, and Puerto La Cruz.  Although 
other sectors have been included, the energy sector has 
figured prominently in these events with figures such as 
Moshiri, Shell President Jaoquin Moreno, and Venezuela 
Petroleum Association President Grisanti addressing President 
Chavez about the needs of the sector. 
 
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SOME COMPANIES TAKING A DIFFERENT TACK 
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7. (SBU) It was interesting to note that there were no 
representatives of ConocoPhillips, ChevronTexaco's partner in 
Block 2, at the ceremony.  ChevronTexaco employees told 
econoff that ConocoPhillips had declined to participate in 
the ceremony, saying they wanted to keep a low profile. 
ExxonMobil (see septel) has also resisted GOV pressure to 
sign a project document for a major petrochemical investment 
in the same type of public ceremony. 
 
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COMMENT 
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8. (C)  With this ceremony and the series of business sector 
fora, the GOV has deftly succeeded in using the energy sector 
particularly to create a sense of momentum in the economy in 
the run up to August 15.  Despite the fact that large scale 
energy projects create little employment for the uneducated 
workers who are most likely to be Chavez supporters, these 
ceremonies create expections and, Chavez hopes, votes. 
However, Chavez's message of friendship for the U.S. 
subsequently slipped when, in front of a gathering of the 
faithful, he once again returned to the theme of cutting off 
oil sales to the U.S. in the face of supposed U.S. aggression. 
Shapiro 
 
 
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      2004CARACA02564 - CONFIDENTIAL