Speech by the Vice President for the Economic Area
Minister of Popular Power for Oil and Mining and President of Petróleos de Venezuela
Rafael Ramírez Carreño
In the National Assembly special session of the Bolivarian Republic of Venezuela, in occasion of the centennial of the oil well Zumaque I
Mene Grande, Zulia state
August 5th 2014-08-14
Speech by National Assembly of the Bolivarian Republic of Venezuela Special Session on the Centennial of the oil well Zumaque 1
Good afternoon, fellow Diosdado Cabello, President of the National Assembly of the Bolivarian Republic of Venezuela; partner Darío Vivas, First Vice President of the National Assembly; partner Blanca Eekhout, Second Vice President of the National Assembly; Fidel Ernesto Vasquez, Secretary of the National Assembly; partner Fernando Soto Rojas, President of the Permanent Commission of Energy and Mines of the National Assembly and other committee chairmen who composes it; Members of Parliament of the National Assembly whose are with us today.
Partner Francisco Javier Arias Cárdenas, Bolivarian governor of Zulia State and the government team that accompanies him; partner Eva Margarita Padrón de Arias, First Fighter of Zulia state; Members of Parliament of the Legislative Council of Zulia state; fellows Mayor and Mayoress of Zulia state; Mr. Deputy Ministers of the Bolivarian Government; and workers of the new PDVSA that are with us today in this act.
Greetings to the Oil Belt Battalion fellows, peers of the Eastern Coast of Lake Maracaibo, of the West PDVSA and to all who are present here; fellow workers of the Ministry of Popular Power for Oil and Mining; a special salute to the working class, represented here by its leading partner Wills Rangel FUTPV President; Argenis Olivares and other fellow workers leaders of Zulia state. (Applause).
A special greeting to Dr. Bernard Mommer, Governor of Venezuela in OPEC. (Applause).
General Tito Urbano Melian, Head of Western Zodi and other military authorities. (Applause).
Inhabitants of our beloved and historic Mene Grande present here, Popular Power, special greetings to the dear people; (Applause).
Peers, siblings Board of Petróleos de Venezuela, other directors, managers, officers and presidents of the new PDVSA subsidiaries, special guests; gentlemen of the media; ladies and gentlemen.
A hundred years after the beginning of oil production in the country, we can talk of full oil sovereignty, a national, popular and revolutionary policy.
First of all, I would like to thank the invitation that has made us our sovereign National Assembly as Speaker Order in this Special Session on the occasion of the centenary of the start of oil production in our country. The commercial production of oil began right here in this same place on July 31, 1914, here on the East Coast of Lake Maracaibo. A special greeting to the beloved people of Zulia. (Applause).
The oil production in the eastern coast of Lake Maracaibo opened the possibility to start of oil exports in 1917, which would be, in the strict economic sense, the beginning of Venezuela history as an oil country, a history that will continue, at least for the next 150 years, thanks to the huge base of oil resources which are in our nation, rescued by the Bolivarian Revolution as a fundamental element of the sovereignty of our country and for the benefit of our people.
Today I want to speak on behalf of hundreds of thousands of oil workers who made possible, over the years, the development of the country's most important industry; I want to speak also on behalf of over 100 thousand new PDVSA workers, who work every day selflessly for the strengthening of our country, which are an unshakable bastion in defense and custody of our oil, and Full Oil Sovereignty policy , one of the main legacies of our Eternal Commander President Hugo Chavez. (Applause).
Today is a day for reflection about one of the fundamental issues in the country: our oil policy. It is a special day to recognize the thought, work, and bright future orientation; that our dear Lord Commander, President Hugo Chavez left us.
The first major reflection we have to do is that our country must be recognized itself as an oil country. We as conscious people can not accept the claim of the major industrialized powers to waive the defense of our interests as an oil producer, of trying to stigmatize oil as a curse. No !, as Commander Chavez said, while oil was for many years an instrument for domination, now with the Bolivarian Revolution the oil has become an instrument of liberation of our people. (Applause).
The Oil activity during these 100 years has dramatically influenced the economic, political, and social future of our history; probably the greatest impact has been filed in the fact that the onset of oil production ushered in penetration and devastating actions of American imperialism in our country. This story is fully explained in a critical study of oil policy book: “The oil issue”, by Dr. Bernard Mommer present here.
The American imperialism turned our country into an oil factory, as it was reported at its time by Commander Chavez. Until the advent of the Bolivarian Revolution, the history of oil in our country was, with varying degrees of intensity, the story of the looting of our natural resources and the expropriation of the wealth that belongs to the people.
Evidence of American interference in our internal affairs constitute events as the overthrow of Cipriano Castro, the imposition of the brutal dictatorship of Juan Vicente Gómez, the overthrow of President Isaias Medina Angarita, the dictatorship of Marcos Perez Jimenez, the long period of Betancourt violence and the coup against President Chavez in 2002. Even today, the ongoing siege of the Bolivarian Revolution and President Nicolas Maduro Moros are clear and irrefutable examples of this constant meddling.
The development of the oil industry was conducted at home by the interests of large transnational corporations in the country, including, primarily, the Royal Dutch Shell and Standard Oil, now ExxonMobil, unfolding its strategy of oil exploration, deep predator of our natural resources and which distort the whole social economic picture of our country.
So it was highlighted, above the interest of our country, the expansion needs of the voracious American imperialism at the end of the First World War; and the development of large industrial complex of the United States signed the actions of transnational oil companies for almost 60-years of Dealer period in our country.
The implementation strategy of the transnational oil company created and developed the oil rentier model we are suffering today which is a strategic enemy of the progress of our country. So, for almost 90 years, a capitalist model deeply backward and dependent on the American economy was established, with little development of its productive forces and a high level of economic and social inequality was established in the country, condemning our most humble people to the most poor living conditions and violence.
Perhaps it is precisely here in Zulia state, where it can be registered more strongly the profound impact of Transnational on our soil, pollution and poisoning of much of Maracaibo Lake with over 16,000 wells drilled and more than 45 thousand kilometers of pipeline lying on his former lake bed, and the devastating fire of Water Lagunillas occurred in 1939, the migration of thousands of farmers in the Andes, the plains and in all emblematic oil regions of the country to the fields and towns of Zulia state as Lagunillas, Tia Juana, Bachaquero, La Paz, Las Rosas, Lama, Cabimas, Mene Grande, the Manuels, Conception and Boscan; are examples of this step of the oil industry in the country.
However, here, in Zulia State, the Venezuela working class was born, giving rise to the first political organizations in the country and the development of progressive thinking, in light of the awareness of this new reality.
The first politic strikes and protests of the Venezuelan working class were centered precisely in this state. Our history must claim the big oil strike of 1936 and 1950. From here, I will take this opportunity to greet Congressman Jesus Faria, whose father was the leader of the strike in the 50´s; such as the history must claim the decisive action of the new PDVSA workers in defeating the oil sabotage of 2002, under the guidance of our Lord Commander, President Hugo Chavez.
Any discussion about oil policy should be clear two fundamental aspects, which are always in conflict between oil producing countries and major consuming countries of international capitalism. They are the sovereignty over the management of natural resources, and the collection and distribution of oil revenues. There is not more activity linked to the concept of sovereignty that oil exploitation. Oil is a nonrenewable natural resource that is depleted, its exploitation is closely linked to the land and its location in the basement linking it directly to the bowels of our country.
The Simon Bolivar Decree of Quito, on October 24, 1829, established since then doctrinaire principle which, as we shall see, was violated in various ways until the triumph of the Bolivarian Revolution and it is a fundamental element of our doctrine . Oil is owned by the Venezuelan state. The State, in its most rigorous concept should be the guarantor of the collective interest of the whole society.
In our country, oil is closely linked to the national collective interest. Oil can not be, in any way, or by any euphemism, in the service of particular and individual interest. The oil can not be privatized under any circumstances. So aptly the Bolivarian Revolution, in its constitutional process in 1999, established, and so it was enshrined in the Constitution of the Bolivarian Republic of Venezuela, the reservation of the oil to the Venezuelan state activity, and it was established that our national company Petróleos de Venezuela, is the only one authorized by the Constitution to manage and control the development of this activity.
The Venezuelan government, as owner, is entitled to receive a payment for the exploitation of a resource that belongs to it: royalties; through this tax is captured the income generated in the international oil market. The royalty, as economic and sovereign right of our country, is the mechanism to reward or not the benefit for the oil exploitation of the resource owner, the Venezuelan state and therefore all its people.
At this point, we should mention the work and support of this concept, by the great thinker and Venezuela revolutionary, Dr. Salvador de la Plaza, and I invite you to read his extensive work on this subject.
The State has the sovereign right to establish taxes that it deems relevant and suitable to its own legislation, any economic activity in the country and, in particular, the main economic activity: the oil industry.
These extraordinary principles that now seem just everyday thanks to the revolutionary action of President Chavez, were violated in our country in the past; the restoration of sovereign management of oil and sovereign exercise of establishing royalty rates and taxes, according to our own laws and interests, have been some of the great achievements of the petroleum policies of President Chavez and constitute objective evidence for the possibility of building socialism in our country.
International capitalism and its major industrialized economies requires, so insatiable, as the unsustainable model of development is, vast natural resources. Capitalism is a predatory system that ends with its forests, its land, its rivers, lakes, oil and, of course, has claimed the lives of millions of human beings on the planet. Here lies the international conflict between the major industrialized economies, the major consumer countries of international capitalism and the oil producing countries engaged as we are in providing and enhancing a natural resource that is depleted.
The major industrialized countries are determined to snatch the sovereign producing countries the manage of their natural resources, the possibility of establish taxes and fees, as well as setting politic coordinations in defense of oil prices; hence the claim directly to control oil exploitation in our countries, through their transnational corporations, through processes called euphemistically opening; or using investment protection agreements and the figure of international arbitration court to undermine our sovereignty over tax and tribute. In addition, they try to torpedo OPEC as a mechanism for producing countries to coordinate the value of oil, or go directly to the use of political instability and violence.
Since the overthrow of Mossadegh in Iran in 1953, the overthrow of President Medina Angarita in 1945, the invasion of Iraq, the coup against President Chavez in 2002, sanctions, and threats against Iran, until the overthrow and murder of the Libyan leader Muammar Gaddafi, have been violent actions of the major consumer countries for control of oil.
Our country, our people, our revolutionary organizations, our Bolivarian National Armed Forces, our oil workers, and the whole country, must be aware of this reality and this ongoing threat to our sovereignty. And the best way to prepare to defend our country, and we are determined to do it, is raising awareness about these issues and strengthening the study of doctrine and Commander Chavez oil policies.
Returning to the thread of the development of our own history, the period of the transnational oil dealer from 1914 to 1975 was a period of wild expropriation of our natural resources, systematic violation of our sovereignty and the establishment of the oil rentier model.
The abandonment of the field, the very high levels of inequality, the emergence of a parasitic bourgeoisie that was strengthened and enriched in collaboration with oil companies; the country of affluence, waste and corruption; the country of submission and surrender to American imperialism; the country of the millions of children born in the cardboard houses; the land of the poor, the excluded, the continuing violence against the lowly; the country of little or no industrial development; the importing country, was the country which emerged from the distortions created by the oil companies and the oil rentier model.
The key to explaining the high levels of inequality, exclusion, and poverty that found the Bolivarian Revolution after 85 years of oil exploitation has to do with a concept: the collection and distribution of oil revenues.
For almost 30 years of the Dealer period, the oil activities paid royalty rates that did not exceed 3 or 4% of the price of a barrel of oil, without any possibility for the state, although it had the political will to charge this tribute, because the Republic was unable to establish or defend oil prices, and less to measure and control oil production
The Ministry of Mines and Hydrocarbons only came into existence from the year 1950, 36 years after the start of oil production. Moreover, the Venezuelan government did not establish in that period any tax to the oil industry, which was a clear sign of the lack of sovereignty over the management of our natural resources.
Here, at this point, we are required to make a special mention to former Medina Angarita. This president had the distinct progressive and nationalist vision of establishing a minimum control over transnational in the country. With the oil reform in 1943, Medina Angarita gave a very important first step to establish a rate of 16 2/3 of the extracted product as well as the first tax to the oil industry; it was achieved that transnational initiated the establishment of refineries in the country to increase to some extent, industrialization of hydrocarbons in the country. Of course, the president Medina Angarita was overthrown and his work cowardly silenced by the once powerful parties of the Fourth Republic.
Another special mention that should be made of the dealer period is the Juan Pablo Perez Alfonzo´s, who with his nationalist thought, expressed in his major work The oil pentagon, first established a conservation policy on the exploitation of oil as a natural resource, the coordination with producer countries to enhance and defend the oil, and the creation of a national operator giving birth to the Venezuelan Petroleum Corporation. The creation of the Organization of Petroleum Exporting Countries (OPEC) is probably one of the most important achievements of the thought of this illustrious Venezuelan. So, finally, we arrive at the nationalization of the oil industry. It must say, nationalization was agreed with transnationals or as indicated by the same Pérez Alfonzo, it was a “chucuta” (incomplete) nationalization.
The oil regime of the international oil companies had come to an end and a new regime had to be created, the regime of the national oil company but withdrew, international oil companies took the initiative to cut up the evolutionary process that was working to actively participate in shaping the new regime that emerged. One of the most serious and dangerous elements of the agreed nationalization that would have its terrible consequences in the development of the oil opening, was that thought, practice and leading cadres of transnational operators in the country remained intact and went on to become in subsidiaries and the address of the new national carrier Petróleos de Venezuela (PDVSA). From the Corporate culture in the transnational oil companies emerged, more empowered than ever, the national oil meritocracy with a deep transnational view of the development of our oil industry.
Moreover, in the Nationalization Law of 1975 it has left open the gap for the privatization of the newly established oil industry through and sadly famous article 5 of the Organic Law Reserving Industry and Commerce hydrocarbons (LOREICH).
In the early 80s, the process of economic, political, moral and social collapse of the oil rentier model prevailed and deepened during the Fourth Republic began. This model was highly dependent, Venezuela had become, like what Dr. Maza Zavala mentioned, in a satellite economy of the American economy, whose only role was to provide abundant cheap oil, all the oil the American military and -industrial complex need to its development.
It was in these years of crisis of the Venezuelan State crisis that reach its collapse definitively in 1989 with the violent events of the Caracazo, the transnational interest now through the oil meritocracy who ran the old PDVSA began the development of the oil opening policy, one downright traitorous, unpatriotic and deeply unpopular policy, which rode the most reactionary expression of the Venezuelan bourgeoisie who was now ready to take power directly without intermediaries and populist parties with which distributed crumbs from the oil revenues. Incidentally, this oil opening policy had the support and approval of the party leadership that controlled the former National Congress.
At that time, the old PDVSA had usurped the role of the Ministry of Mines and Hydrocarbons as institutional seat of oil policy in the country. The national company established sales prices of oil, granted rights to exploit new areas and began to develop, as a real Trojan horse, a global energy policy as it was called by themselves-to reestablish the transnational control over the most important country oil areas and, especially, it had its sights set on appropriating the largest oil reserves on the planet: the Orinoco Oil Belt.
Let us consider the facts: Since 1986, begins the development of the internationalization policy of the old PDVSA, one important strategy to take state control of industry assets, settling outside Venezuela, beyond the control of the Republic. First, it was the Ruhr Oel circuit refiner in Germany and then systematically they would proceed with the acquisition of the entire circuit refiner Citgo in the United States. It mattered little to the old PDVSA that these circuits refiners never processed large volumes of Venezuelan crude, or even that these refineries were managed. Companies acquired by the old PDVSA never gave dividends to the Republic, to its shareholder. The main objective of this policy was met; to remove state control, tottering in the midst of a severe economic, political, and social crisis, assets worth more than $17,000 million.
One of the most heinous acts of the internationalization strategy of the old PDVSA was that assets acquired abroad were offered and became the guarantees for the return of American transnational companies operating in the country, especially the new areas of the Orinoco Oil Belt; we had and have those companies abroad virtually hostage of the oil transnational international interest. In economic terms, this scheme to promote internationalization, the acquisition of these assets, the old PDVSA established a policy discounts on the price of oil that was shipped to the refiner Citgo circuit, this comment is probably useful for internal discussion at the National Assembly when it comes to topics of discount.
So while the price of oil in those years was around $ 10 per barrel, discounts reached four dollars a barrel for oil to be sent to the most powerful economy in the world were established. This discount would be equivalent today with an oil price of $ 100 a barrel to $ 40 discount per barrel to be sent for export. This discount policy brought consequently huge fiscal sacrifices, which failed to receive the corresponding royalties to the value of oil in the international oil market.
This has been one of the saddest chapters written by oil meritocracy of the old PDVSA, to promote its internationalization strategy and directly transfer wealth from the country to the American economy.
Consecutively, the politics of oil Opening took advantage of the gap left by the fifth article of the law reserving to the State the industry, through the figure of service contracts, to establish true oil concessions to domestic and international private sector, outside state control, with the so-called operating agreements.
In successive rounds there were delivering oil production areas to private companies operating and perceiving revenues value of exported oil, the argument used at that time was that they were marginal fields; for example, the marginal Boscan field was given to Chevron when it had a production of 80 thousand barrels / day of oil.
In this round, not only it was delivering oil production to private, but also it was removing the oil tax system, companies were no longer required to pay royalties to the state, they only paid taxes on the non-oil income, ie they have exceptions not to pay taxes that were established for the oil industry, but common taxes, like any other economic activity, when they paid them.
It was assuming the arbitration mechanism to settle disputes with the state until sometime abdicated from the judicial sovereignty of the Venezuelan government on these issues, resorting to international arbitration as a method of dispute resolution.
The Fourth Republic, the old PDVSA agreed, by a vote of the former Congress, including international arbitration to other courts, tribunals outside our jurisdiction, judged the sovereign decisions of any state, such as the facts of the tax, royalties or oil exploration.
At this stage of development of the disastrous oil opening and the old PDVSA had transferred significant assets outside state control, had delivered more than 500 thousand barrels / day of production to private companies and it was developing the strategy to turn the Orinoco Oil Belt into the called Orinoco Bitumen Belt.
Based on a real scam to the entire nation, oil meritocracy, who ran the old PDVSA argued and blatantly lied in claiming that the oil of the Orinoco Oil Belt was not Oil but it was crude bitumen. This argument was certainly not a matter of semantics; Oil turned into bitumen in the Orinoco oil Belt, then the price was equivalent to the price of coal.
This production would be out of the quota system of OPEC, because it would become synthetic oil, as the International Energy Agency and transnational hastened to affirm. To accomplish this difficult task they should enjoy special conditions, ie royalties 1%, no oil taxes, operational ownership control, export control and to be protected by international law outside our national jurisdiction.
This was, gentlemen, the delivery that was made in the Orinoco Oil Belt in the oil opening; with delivery in the Orinoco Oil, a Bitumen Belt for meritocracy of old PDVSA, we came back to infamous, the worst years of the Dealer period. Now, ExxonMobil, ConocoPhillips, Chevron, Total Fina and many other companies returned to the country with tax and legal conditions that had already wanted to have transnational of the Dealers period.
The oil opening developed a frankly anti-OPEC policy ie a volumetric policy aimed at flooding the oil market regardless of its price.
This was the promise of transnational and oil meritocracy proposal to tackle the economic crisis of the state in those years: to increase production regardless of price; repeal the tax and flexible control conditions for corporations to invest and develop our resources; to minimize the role of government and PDVSA in the industry; to privatize non-core areas-so they called it, the transport fleet of transport ships, drills, water injection, gas injection, the computer control system, the export terminals, to minimize the role of PDVSA in existing areas and the development of the Orinoco Oil Belt.
The result of the oil opening was the thunderously collapse of the State of the Fourth Republic in economic, political and social level; the oil opening is always advancing in the midst of crisis, promising mirages and perks that never has fulfilled.
Oil prices collapsed as a result of the volume policy that was established in the old PDVSA, and the crisis within OPEC with the continued violations by the quota system. The old PDVSA had given the coup de grace and thus it was constituted the main economic actor representing the oil companies, which sought to govern this country with the most right-wing and violent sectors of the parasitic bourgeoisie that had strengthened its defense.
When folding the tax regime at even lower values established during the dictatorship of Juan Vicente Gómez to transnational, the oil economy of the nation collapsed, oil revenues was transferred abroad and the majority of the Venezuelan people left out of any participation of oil revenue.
It was the end of the IV Republic, in those terrible years of system collapse, global crisis, poverty and violence against the people, swells the light action of the soldiers of the Fatherland on February 4, 1992, and it was felt with clearly meridian voice and the message of our Lord Commander Hugo Chávez. (Applause).
From the very beginning of the Bolivarian Revolution, Commander Chavez had the awareness, a clarity of the need to control the country's main industry, control of oil as a strategic and essential for the development of the Fatherland sovereign activity, and to support the economic and social plan for the development of our people.
The first actions of the Revolution were reflected in the constitutional process, where, under the important constitutional action, among whom should be mentioned Dr. Gastón Parra Luzardo, son of this Zulian land, was established in our Constitution of the Bolivarian Republic of Venezuela in articles 12, 302 and 303, the reserves of the primary activities of the oil industry to the Venezuelan government and PDVSA as the 100% owned national operator of the Republic.
Immediately it came the first laws in the context of the Enabling Act to the Commander Chávez, the Hydrocarbons Law was established of strategic importance to restore the sovereign principles on the management of our oil, the oil tax revenue, jurisdictional sovereignty, the role of our national operator, the Ministry of Energy and Mines as an institutional seat of oil policy.
Moreover, an aggressive offensive began within OPEC who led the Commander Chavez himself, to restore the unity and cohesion of our Organization of Petroleum Exporting Countries, as well as returning to our country's leadership in defending the price of our oil.
The Heads of State and Government of OPEC summit in Caracas in 2000, was a highlight for the retaking of our national defense strategy in oil prices. Here we should especially mention the work of that great revolutionary companion, Dr. Ali Rodriguez Araque, first Minister of Energy and Mines of the Revolution by that time. (Applause)
As the parasitic bourgeoisie and the oligarchy reacted against the enabling legislation of the Revolution, the oil meritocracy and transnational immediately raised their voice openly against the Constitution, against the Hydrocarbons Law and the Commander President Hugo Chavez. The coup of April 2002 had a strong smell of oil, the oil meritocracy and the directive of the old PDVSA were openly mobilized and involved in the coup; Transnationals were activated in the process of destabilization because very soon they understood that President Chavez would not allow to continue violating our sovereignty and plundering our oil with the coarse and damaging concessions they had obtained the destroyers of the Fourth Republic in the oil opening, they understood that President Chavez was not a covenant man with elites, he was the President of the Venezuelan people, the humble and with them his fate would be played.
Defeated the coup that bright April 13th by the people and our patriotic soldiers, soon the oil meritocracy of the old PDVSA joined the shame in square France, Altamira, and activate one of the most violent episodes in our history of oil country without any in the world, preceding the sabotage of the oil industry.
Of course, they are not coming back again!
With the oil sabotage, meritocracy of old PDVSA was determined to overthrow President Chavez, repeal our revolutionary Bolivarian Constitution and our laws. The oil sabotage revealed the arrogance of the elite who ran transnationalized our oil industry and the profound contempt they felt by our people and our country.
With the help of transnational companies that had given up control and automation of PDVSA, the company Intesa, and its control over the terminals and transportation systems, set a new lock in our country, and not by European armed that blocked our shores during the government of Cipriano Castro, but now in the hands of the oil meritocracy of the national company to enhance transnational interest.
The oil sabotage caused us more than fourteen billion dollars in direct losses, besides that it sought to collapse the economic heart of our country denying our people the resources for fuel and oil sales; It was a fierce attack to our people, all of us here remember the extraordinary battle that gave our people to rescue its oil industry and we must pay a tribute to them .
While something like the oil sabotage never happened at any oil country, nor even in oil-producing countries subject to invasions by foreign forces in the case of Iraq, there is a famous photo of Marines protecting the Iraqi oil industry; of course, for appropriating it. While this is unprecedented in the history of any oil country, the response of our people, of our soldiers and our oil workers has not any precedent for its courage, determination and patriotism with which our workers took to defeat sabotage oil. (Applause)
The Meritocracy and the Venezuelan bourgeoisie in its arrogance thought they would daunt and put our people in knees, and what they did was lift that giant next to Commander Chavez.
It must be said clearly, President Chavez took over the oil workers and with our Bolivarian National Armed Forces and the most humble people it was delivered a crushing defeat to the meritocratic elite that had taken over our national company, to return the oil to the people and make our national company, now our new PDVSA, a company subject to the Venezuelan state and instrument of liberation of our beloved Venezuelan people.
My appreciation to all the oil workers who knew how to fight in defense of our government, our people, and our new PDVSA and who resisted the violence and attacks of a stateless meritocracy widely supported and encouraged by the bourgeoisie and the extreme right in Venezuela.
Our appreciation goes also to professional soldiers, men and women of the people without any interest and only answering to the call of the Commander President Chávez, they were fed by thousands to our oil installations to defend us and support our oil workers. (Applause)
The defeat of the oil sabotage is a beautiful lesson of conscience and patriotism that gave our people with our Eternal Commander, Commander Chávez; but the defeat of the oil sabotage eventually paved the way for the Bolivarian Revolution to be in an offensive and to deploy the full extent of the oil policy of full oil sovereignty,a national policy, a popular policy and a revolutionary policy, the oil policy of Commander Chavez, which is a national policy that addresses the restoration of full sovereignty over the management of our national resources and the restoration of all our taxes and royalties that we need to establish under our laws to catch and distributing oil revenues, it is a popular policy because the distribution of income should be a popular distribution, it must be to serve the people and that is what is constantly in conflict, and when the sovereign National Assembly grants additional credits discussed for pensions, for the salaries of all workers we are distributing oil revenues in a revolutionary way, and it is a revolutionary policy because now the oil income should be a tool for the construction of a new economic order, should be a tool for building of socialism.
Once the Revolution went on the offensive, it began a course of action; in the first instance, the Ministry of Petroleum and Mining as a representative of the Venezuelan state, re-established its role as institutional seat of the national oil policy; It is now the one who establishes the sales prices of our oil destroying policies of discounts of the old PDVSA ; it exercises control of our production and export of oil and oil products; it sets production coordination policies with the defense strategy of prices and grants the rights and mining areas as established in our Hydrocarbons Law. The Ministry of Petroleum and Mining holds a controlling stake in PDVSA in all of its subsidiaries.
We were in this sovereign National Assembly in May 2005, when it was then chaired by President Nicolas Maduro today. A special commission headed by Rodrigo Cabezas Deputy was established, where it was received all allegations of research we did from the ministry, in which we documented and denounced all the irregularities committed during the oil opening. This is a document to be studied, to be looked into because it was a thorough job that the National Assembly did as a seat of popular sovereignty of that black period: the oil opening.
The first line of action of the policy of full oil sovereignty was to restore fiscal oil revenues, first , following a policy to increase the price of oil, coordinating it within the OPEC body a correct policy of production quotas that led oil price of $ 10 a barrel to an average of $ 100 a barrel in recent years; second, initiating a process to restore the minimum royalty rate from 1% of given levels that multinational paid by that time in the oil opening, to the levels of 33% that today pay all oil operators in the country.
The Law on Income Tax was amended to eliminate the exemptions that had been granted in the oil opening and to restore the tax rate 50% for all oil operators. These actions of restoring fiscal oil revenues have allowed to capture in the period an income from oil revenue of 510 billion dollars that otherwise would have left the country in the hands of transnational (Applause).
Here we start a discussion of a fundamental aspect of the oil policy of Commander Hugo Chavez, an aspect that defines the character of a government in an oil country. A question arises, who is the oil revenue? Who owns it? No doubt, the rent is the Venezuelan people. (Applause).
The oil man belongs to the people and to the Venezuelan State, as representative of the collective interest, he captures the oil revenue to be distributed to his benefits. There are two models: the income, which is captured by transnational and parasitic bourgeoisie appropriates it, or the income, which is captured by the Venezuelan State to distribute it for the people. That is the discussion; it is the ongoing discussion in the resource management of the Venezuelan state; who appropriates it, who benefits from the vast oil development.
In our revolution, there is a popular and revolutionary distribution of oil revenues, that's the big difference between us and any other proposals made by the Venezuelan right. (Applause).
It is from the restoration of fiscal oil revenues and revolutionary distribution of oil revenues that the revolution could create and sustain social missions as a way to distribute directly oil revenues in the village, making health, education, sport, culture, housing, living, inclusion, dignity; Mission Barrio Adentro I, II and III, Mission Robinson, Ribas Mission, Mission Sucre, the Great Mission Knowledge and Work, Scientific Mission, Culture Mission, the Great Mission Sons and Daughters of Venezuela, the Feed Mission, Jose Gregorio Hernandez Mission, Mission Miracle, the Great Housing Mission Venezuela, the Great Mission in Higher Love, among others, are all popular distribution of oil revenues.
The development of large infrastructure projects, schools, universities, hospitals, roads, transportation, satellites, telecommunications, is popular distribution of oil revenues; the abatement of poverty, extreme poverty, illiteracy, infant mortality, unemployment, pension increases, is also the product of the distribution of oil revenues; program development as Mercal, PDVAL the Canaimitas, this is popular distribution of oil revenues.
Having created its own financial system supported by big brother countries, like China, it has been possible with the proper disposition of oil revenues for national development, the creation of Fonden and Chinese-Venezuelan Fund, besides it has achieved independence from the international financial system, it provides us with resources for the development of large structural projects that are set out in the Plan of the country.
The second line of action of full oil sovereignty, has been to re-establish control of the Venezuelan state through the new PDVSA of all primary activities reserved by the Constitution to the Venezuelan state; so, from the oil sabotage, we initiated the termination of operating agreements and their migration to figure of JVs which are covered by our Hydrocarbons Law under the control of the new PDVSA, ie we recovered all production volumes that were privatized in the oil industry.
In addition, we took control of our terminals, water injection system, gas, drilling, tankers, boats, tugs, barges, proprietary technology, and all the necessary elements for sovereign management of our oil production.
Our oil industry has nationalized more than 214 oil companies which were in private hands and have adjusted to our legislation. We have created new subsidiaries as PDVSA Industrial, allowing us to provide us with the necessary inputs to ensure our oil production.
From 2005, with the new PDVSA a company that is subordinated to the Venezuelan state began rolling out a policy of international cooperation and market diversification, and thus it was born the Petrocaribe program, which supplies and guarantees oil-indeed, always at market prices to meet 46% of demand of the 18 signatory countries. They are brother countries, small countries that need our help and we have directly intervened to free them from speculation that with energy makes multinationals in the Caribbean.
We started our diversification supplies to China and India. Now we sell, both countries together, about 1 million barrels a day of oil. Today China is the world's second largest economy, China is the largest importer of oil in the world; India is an economy that is in constant growth, that is, is the economy, it is diversifying our markets.
On January 2007, the Commander President Hugo Chavez ordered the nationalization of the Orinoco Oil Belt, he did it loudly, he did it in the swearing of the new government that took office that year. These projects in Oil Belt were still under the control of multinationals in the oil opening.
On 1 May of the same year 2007, more than 40,000 oil workers got together and took control of the areas, as opposed to establishing the Nationalization Law in force by that time, then it had been transferred to the oil multinationals. Almost all of us here remember clearly the Commander Chávez, with his vibrant speech and courageous action, when he put an end to the disastrous policy of the oil opening and rescued the Orinoco Oil Belt for the country and benefit of all the Venezuelan people. (Applause).
Undoubtedly, as it was mentioned in his opening words the comrade Diosdado Cabello, today we can say with clarity that we have the full and sovereign management of our oil industry, thanks to the clarity, courage and determination of the Commander President Hugo Chavez . (Applause).
Few oil producing countries can make this claim, we are one of the few oil producing countries in the world that has a strict and tight control over the sovereign management of its natural resources.
The deployment of our policy of full oil sovereignty, of course, has generated the most bitter and aggressive reaction of transnational corporations and their lackey’s representatives of the national bourgeoisie, with their media attacking us every day since we defeated sabotage oil.
In international courts ExxonMobil and ConocoPhillips American companies intend to charge expensive our sovereign decisions in the management of oil; the extreme right in the United States seeks to recover the privileges they once had, for the appeasement under the Fourth Republic; Venezuelan right wing continues its constant attacks on our oil policy, on our dear new PDVSA and on our workers.
It has never ceased harassment to our Bolivarian Revolution and after the loss of our Commander Eternal Hugo Chavez, President Nicolas Maduro, the Workers President, is now the center of the attack and hatred of the bourgeoisie itself that has attacked our people for so many years.
I myself, fellow deputies, from here, from Mene Grande, in front of our sovereign National Assembly, I mean, very calmly but with unwavering determination and firmness, that workers in the new PDVSA will not allow attacks on our President Nicolas Maduro or against our revolutionary process, we will know how to defend the legacy of our Commander Chávez, its oil policy and the rights of the humblest people. (Applause).
We have shown it and we will continue to demonstrate it, and people can count on that, and all the revolutionary force, with workers in the oil industry; everyone has to know it, the oil industry is in patriots hands, it is in the hands of its workers and these workers support our Revolution. (Applause).
100 years into our commercial production of oil, however, we still have much work, many challenges, many problems, but also many future prospects. Our historic aim is Venezuela as a country power, Venezuela as energy power, it will have its seat in our traditional areas of East and West that will be full of oil activity, but also in the development of our new oil province: the Orinoco Oil Belt Commander Hugo Chávez.
The Revolution has managed to rescue the entire Nation, the largest reserve of oil on the planet, 295 billion barrels of oil, which gives us an extraordinary resource base to increase our production capabilities, keeping the right price for our oil.
We have over 100 thousand workers with a high level of awareness of their role in our revolution, box seasoned in defeating the oil sabotage and tanning in the ongoing fight against poverty, in defense of the Revolution, bastions and custodians of thought tanker of the Commander Chavez.
We now have the daunting task of using oil revenues as a means to overcome the oil rentier model, which has been developed over the 100 years of history; we have to support the expansion of our productive forces, all our internal capabilities; we have to continue improving the social, educational and work opportunities for our people to join to the production work throughout society, for the homeland and for socialism.
We faced difficulties, nobody can deny them, we are under an economic war, it is characteristic of the contradiction that arises from the effort to build socialism in constant struggle with the values and categories of late capitalism and dependent rentier model that still survives in our country. Today, however, we are stronger, our people are more awared, its revolutionary political forces, its patriotic forces are closer than ever; we will build a new economic order that, under the leadership of President Nicolas Maduro, lead us to build and establish the basic elements of a society that our Lord Commander Hugo Chavez dreamed: "a socialist society"; It is the best recognition we can do to dedicated, to the selfless work, love of the humble, to the Homeland of Commander Chávez. We swear it and we will win. (Applause).
Viva Commander Chavez! (Viva!)
Independence and Socialist Homeland! (We will live and win!)
Thank you very much, gentlemen; thank you very much, fellow workers. (Applause).