The Apertura generated increased expectations of a new petroleum boom period as rents for houses in formerly forsaken oil communities such as Jusepin skyrocketed to as high as US$2,000 a month. Bidding for these new concessions filled PdVSA coffers with millions of dollars for which the conglomerate never provided full accounting. For some observers, this policy actually represented part of a PdVSA strategy that would lead to the privatization of the enterprise. A PdVSA “Special Advertising Section” in a 1999 issue of Time (Latin America) floated the possibility of privatizing the enterprise. The eight-page supplement concluded that “The hard work in the future lies in convincing a nationalistic public to accept what is almost inevitable—in the future PdVSA will be privatized.”

In its haste, and perhaps as part of its arrogance, PdVSA had failed to consider the valuable lessons acquired in previous decades by the foreign multinationals that operated in Venezuela. From their own bitter experience, after clashing with labor, business sectors, and even the government, the foreign multinationals had recognized the need to engage broad sectors of the Venezuelan populace and gain their support before pursuing any new initiatives. Though it functioned as a “Venezuelan” enterprise, its autonomy had ostracized PdVSA from elements of the Venezuelan population and had increased antipathy toward the values that it represented.

The Chávez government assumed office in 1999 at a time when oil prices had fallen substantially. The administration immediately assumed a proactive role in an attempt to stabilize world prices, forging a working consensus within OPEC while enhancing the role played by the Ministry of Mines and placing its personnel within the PdVSA administration. These policies, especially the latter, brought the government into immediate conflict with the bureaucracy of the oil conglomerate.

The passage of a new national constitution in 1999 and special laws in November of 2001 applied largely to new contracts and placed the administration on a collision course with PdVSA. The government’s replacement of the PdVSA leadership served as a backdrop to efforts to oust Chávez in the coup of April 2002. The participation of PdVSA employees in the strike of December 2002 and January 2003 eventually resulted in the wholesale dismissal of the strikers.

In the aftermath of these events, the government proceeded with a complete overhaul of PdVSA, establishing the enterprise as a cornerstone of its social policy. One of the many unintended consequences of the recent political conflict over PdVSA is that the oil debate has been removed from the hands of the “experts” and has been democratized. Oil is now part of the public political discourse, in which all Venezuelans from every sector in society actively participate.

Managing Oil Policy

The centrality of oil in the Venezuelan economy has for decades fueled debates concerning its role in society. In 1936, Pietri optimistically suggested that oil’s wealth could be “sowed” in order to diversify and expand the economy. After years of managing oil policy, Juan Pablo Pérez Alfonso in 1976 contended that the country was hopelessly sinking into the “devil’s excrement.” By the 1990s, even Uslar Pietri had abandoned his once optimistic assessment of oil’s role in Venezuela and viewed dependence on oil as a major calamity for the nation affecting not only the economy, but also irrationally serving as a symbol of nationality.

During the 1990s, it became obvious that the political and social model associated with the traditional oil economy was unsustainable. The Venezuelan population had expanded dramatically since the 1960s, when important sectors appeared to benefit from the nation’s oil revenues. During the 1980s, the suggestion that the oil economy could provide an entryway into the middle class ceased to hold sway among the disenfranchised sectors of society.

Instead, the widespread perception was that oil only fueled the success of a small privileged sector of society directly associated with the enterprise or its affiliates. The present government has recast this proposition, attempting to portray oil as the benefactor of the entire nation. PdVSA now earmarks revenue to fund education initiatives, medical services, and a new training facility for the national soccer team. In the immediate future, Venezuela will continue to be vulnerable to the vicissitudes of world oil prices, and eventually the government will be judged by the same yardstick that was applied to its opponents.