MercoPress. South Atlantic News Agency

Signs of Venezuela oil strike weakening

A seven-week oil workers' strike in Venezuela appeared to be weakening on Tuesday, although industry experts said it would be many weeks before the government of President Hugo Chávez was able to ramp up oil exports to anything close to pre-strike levels.

Tanker pilots in Lake Maracaibo, in the west of the country, were returning to work, shipping sources said. This development will allow employees at Petróleos de Venezuela (PDVSA), the state oil company to move several strike-bound vessels. Since December, Venezuela, previously the world's fifth-largest oil exporter, has been shipping about a tenth of its pre-strike volume of 2.4m barrels per day, helping send oil prices to their highest level in two years. Shipping sources said 70 per cent of pilots were now set to return to work, a move that was likely to lead to the normalisation of shipping activities in the crucial Lake Maracaibo area within the next week. Horacio Medina, leader of the Unapetrol oil workers' union, which is aligned with the opposition-led drive aimed at forcing Mr Chávez to resign and call early elections, said the pilots had received a generous "offer" from the government. The pilots' return is likely to prompt other dissident PDVSA employees, particularly blue-collar oilfield workers, to follow suit as morale weakens. "This is the government's way of dividing and ruling, breaking up and paying off components that are critical to getting some of the crude exported," said Fareed Mohamedi of PFC Energy, a Washington-based consultancy. The return of tanker pilots was a critical step that would allow non-PDVSA vessels to dock and load with crude oil, Mr Mohamedi said. "It would be a good start for the government. It needs to export anything it can." But it was unclear on Tuesday how quickly the government would be able to break the strike in other sectors of the oil industry, and in turn lift crude oil output and exports. Venezuela is currently producing 660,000 b/d of crude oil, according to dissident PDVSA managers, barely a fifth of the 3m b/d it was producing in November. Permanent damage to as many as 20 per cent of the country's oil wells, a lack of experienced management and a cashflow crisis in PDVSA will render it impossible for the government to raise crude output above 1.5m b/d in less than three months, industry sources have warned. Source: FT