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Viewing cable 06CARACAS1616, CHAVEZ OPENS OPEC 141ST EXTRAORDINARY MEETING

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Reference ID Created Released Classification Origin
06CARACAS1616 2006-06-01 20:34 2011-08-24 01:00 UNCLASSIFIED Embassy Caracas
VZCZCXRO5190
RR RUEHDE
DE RUEHCV #1616/01 1522034
ZNR UUUUU ZZH
R 012034Z JUN 06
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 4861
INFO RUEHHH/OPEC COLLECTIVE
RUEHBO/AMEMBASSY BOGOTA 6567
RUEHBR/AMEMBASSY BRASILIA 5516
RUEHBU/AMEMBASSY BUENOS AIRES 1258
RUEHLP/AMEMBASSY LA PAZ 2056
RUEHPE/AMEMBASSY LIMA 0297
RUEHSP/AMEMBASSY PORT OF SPAIN 3176
RUEHQT/AMEMBASSY QUITO 2136
RUEHSG/AMEMBASSY SANTIAGO 3561
RUEHDG/AMEMBASSY SANTO DOMINGO 0219
RHEHAAA/WHITEHOUSE WASHDC
RHEBAAA/DEPT OF ENERGY
RUCNDT/USMISSION USUN NEW YORK 0247
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY
RHEHNSC/NSC WASHDC
UNCLAS SECTION 01 OF 02 CARACAS 001616 
 
SIPDIS 
 
SIPDIS 
 
ENERGY FOR CDAY, DPUMPHREY, AND ALOCKWOOD 
NSC FOR DTOMLINSON 
 
E.O. 12958: N/A 
TAGS: EPET ENRG EINV VE
SUBJECT: CHAVEZ OPENS OPEC 141ST EXTRAORDINARY MEETING 
 
 
1.  SUMMARY:  President Chavez opened the 141st Extraordinary 
Meeting of OPEC mid-day June 1 with a speech of almost two 
hours that was long on attacks on U.S. imperialism and short 
on substance.  After giving a rambling verion of Venezuelan 
and OPEC history, he proposed a 50 USD floor for oil prices, 
the adoption of the euro for oil transactions, and the 
incorporation of new members, particularly Bolivia.  END 
SUMMARY 
 
------------------------- 
I DON'T THINK HE LIKES US 
------------------------- 
2.  Chavez began his speech by asserting that OPEC is 
composed of third world countries that are victims of 
colonization.  He then traced the history of Venezuela from 
the sacking of Latin America 500 years ago by the Europeans 
to the present, with a heavy focus on the victimization of 
Venezuela by colonial powers and U.S. oil companies. 
According to Chavez,  the U.S. backed Venezuelan dictator 
Juan Vicente Gomez who overthrew the first Venezuelan 
president to enact laws which safeguarded natural resources. 
Gomez then proceeded to give U.S. oil companies concessions. 
According to Chavez,"there was never a drop of oil for the 
Venezuelan people".  Oligarchs and the U.S. sucked all of the 
oil out for themselves. 
 
3.  Chavez devoted considerable time to a critique of the 
consumerist culture of the West in general and the American 
way of life in particular.  He called capitalist consumerism 
unsustainable.  Chavez blamed high oil prices on geopolitical 
tensions, "agression against Iraq", threats against Iran and 
Venezuela, speculation, a lack of investment in refining, and 
an increase in consumption.  He criticized the model of 
consumption in developed countries and cited the use of 
automobiles in Europe and the United States as an example of 
"extreme individualism". 
 
4.  Chavez also attacked "U.S. imperialism" at length and 
stated the U.S. had been in a state of permanent agression 
against Venezuela for the past seven years and it was also 
directing its agression against OPEC.  He said U.S. 
opposition to his visit to Bagdad was proof of U.S. 
agression.  He also claimed the April 2002 coup was not only 
directed at him but at the "heart of OPEC".  He went on to 
add that President Bush is a "threat to the world" and called 
for the withdrawal of U.S. troops from Iraq and the cessation 
of threats against Iran.  He demanded U.S. troops  withdraw 
from Iraq "to stop the abuse against the Iraqi nation and 
that the threats against the Iraqi nation, an OPEC country, 
cease."  He requested that OPEC member states be left alone 
so that they could develop.  According to Chavez, OPEC 
exports peace and progress, not just petroleum. 
 
------------------ 
PROPOSALS FOR OPEC 
------------------ 
5.  Chavez ended his speech with three basic proposals.  He 
stated it was not necessary to increase production and argued 
that there is currently an excess amount of production.  He 
then turned to the subject of price bands, which he has 
raised repeatedly in the past.  According to Chavez, OPEC 
should consider a band with a floor of 50 USD and an 
"infinite" roof.  In other words, there should be no limit on 
increases in oil prices. 
 
6.  After proposing a floor of 50 USD, Chavez then stated 
that Venezuela and some OPEC members were interested in 
adopting the euro for oil transactions, as the dollar would 
only weaken due to irresponsible U.S. fiscal policies.  OPEC, 
according to Chavez, should drop the dollar just as the U.S. 
dropped the gold standard.  He asserted the existence of a 
U.S. "speculative bubble" (based on current U.S. fiscal and 
monetary policies), which he called a threat to the world. 
 
CARACAS 00001616  002 OF 002 
 
 
He called on OPEC to get rid of the "dictatorship of the 
dollar".  Chavez' observation that "the tomb of the Empire 
(United States) is already prepared" drew enthusiastic 
applause from Venezuelan officials, who were a minority in 
the audience, and a tepid response from the foreign 
delegates. 
 
7.  Chavez ended his speech by calling for the incorporation 
of new members from Africa, Asia, and Latin America.  He 
praised Bolivian President Evo Morales for taking control of 
his country's natural resources.  He concluded by stating he 
dreams of a day when Venezuela is not the only Latin American 
OPEC member. 
BROWNFIELD