Venezuela oil woes hurt Chavez ahead of vote

[RebelLion]

By Brian Ellsworth - Analysis

CIUDAD OJEDA, Venezuela (Reuters) - Thousands of Venezuelan oil workers have been laid off or are going without pay as oil prices tumble, hurting President Hugo Chavez's chances of winning a reelection referendum on Sunday.

Oil projects have shed employees and wages are backed up by as much as six months as collapsing prices have left the OPEC nation struggling to meet obligations, frustrating even some oil workers loyal to Chavez.

The discontent could hurt Chavez in a tight vote on lifting a two-term limit on presidents that would allow him to stay in power for as long as he keeps winning elections. Polls show the self-styled revolutionary probably has a slim lead.

"It's outrageous that workers haven't been paid," said Jose Marcano, who works in this sweltering oil city on the shores of oil-rich Lake Maracaibo. "I believe in the revolution, but I think oil workers are going to vote 'No' in protest."

These workers are the first to feel the impact of the oil price plunge that will likely slow Venezuela's economy and may dampen support for Chavez -- a reality that appeared to push him to hold the vote as early in the year as possible.

The referendum will likely hinge on Chavez's ability to get supporters to the polls. A broad package of constitutional reforms that included the current amendment was narrowly defeated in 2007 mostly because of heavy abstention by Chavez supporters.

Chavez, who has been in power for a decade, would have to leave office in 2013 if he loses the vote on Sunday.

State oil company PDVSA's roughly 60,000 employees are still being paid. But it has built up billions of dollars in debts with service companies, which have been unable to pay around 5,000 workers across the country for lack of cash.

In addition, PDVSA has ended some of its contracts with service companies -- leaving some 4,500 workers out of a job.

Hardest hit has been the state of Zulia, an opposition stronghold that depends on the oil sector for half of its economic activity and where some 230 oil service companies have gone unpaid for months.

Some workers in Zulia say they are considering halting activities such as worker transport, but a broad industry strike is unlikely after a grueling 2002-2003 shutdown allowed Chavez to take control of PDVSA.

The state oil company is now campaigning heavily for Chavez, with staff often leaving offices for rallies and companies owed massive amounts by PDVSA being told they will not be paid until after the vote.

OIL TUMBLE

For years, Chavez has used oil revenues to finance social programs expanding health and education services, boosting his popularity but leaving PDVSA burdened with billions of dollars in costs unrelated to oil production.

He also provides low-cost oil to allies such as Cuba, which sends doctors to Venezuela in return, and to a group of Caribbean nations that have struggled with high fuel bills. Critics accuse Chavez of giving away oil through such programs. Continued...

http://www.reuters.com/article/reutersE ... YK20090209

[FAH1223]

oil had no business at being $150 a barrell

hell, it has no business being at $75 a barrell

it should be between $40-60 all the time

[Aerosmith]

Fah my analysis says otherwise. Venezuela will prosper before the elections. Oil will be in the ranges of $70-75 before summer Insha Allah. There will be a trigger, be it middle east skirmish, a run on the dollar(done by China). Obama is already phucking it up doing his part with delay in stimulus package. Let's hear what he says tonight at 8:00pm.

On a good note, finally GM will be forced into bankruptcy. Yeah