Caracas Chronicles

Last week, Venezuela’s hyper-nationalist government – the same one that bitterly decried the 1990s’ Apertura Petrolera as a giveaway of National Sovereignty – signed an enormous deal with multinational oil companies to expand Venezuela’s oil production. It was the first such deal in the oil industry in Chávez’s 11 years in power. Chevron and Repsol won.

The event was remarkable on several counts.

In contrast to the much-maligned apertura, the winning bidders will actually be able to list Venezuela’s oil reserves under the "assets" column in their balance sheets – a virtual privatization of our oil before it’s even been pumped out of the ground.

And while chavismo hailed the auction as a victory, the process took much longer than it needed to, and the government’s initially preposterous terms were significantly softened after the first couple of attempts to auction off the blocks flopped.

It’s when you get to the details that the irony gets heavy: a government that spent years gleefully going to town on the low royalty rates charged on the initial set of heavy-oil apertura projects ended up having to slash its regalía demands by fully one third. A movement that  has long portrayed international arbitration clauses as  "instruments of transnational capital’s domination of the third world" found itself forced to put the clauses back in. All to sweeten the deal for transnational capital. Even then, their name is so black in international oil circles that one of the three blocks put up for auction didn’t manage to attract any bids – which is crazy, considering there was zero exploration risk.

But I’ll leave debate of the terms of the transactions to the experts (a good place to start is Miguel’s excellent summary). What strikes me is that if all you did was listen to our opposition politicians, you wouldn’t have heard about any of this.

Given the significance of the move, our opposition politicians’ inability to articulate an opinion about this is inexcusable.

You would be hard-pressed to find a more important public policy issue than the terms under which Venezuela is going to develop its oil resources. Sure, education and electricity are important, but as a good friend once incisively noted: "Venezuela es un pais eminentemente petrolero."

In other words, oil is where you start. Anything you want to do in the future begins with oil rents: how much of them you generate, how you get the money to pump out the oil, and – most sensitively – who actually owns the stuff.

Only when you have the answers to those questions are you on solid footing to move the debate forward and answer: what do we do with the rents? Failure to do this puts you on shaky ground, rhetorically speaking.

Proyecto Carabobo poses many questions: is this a model for how the opposition will invite foreign investment in a future government? Will they review  the legality of these agreements if they win a majority in the AN? Have they stopped to consider that the cash being paid by Repsol and Chevron up front is now being used to repress opposition activists? What do they think of the winners, given Chevron’s tawdry reputation in the region? Have they wondered whether Repsol’s victory was unrelated to the company’s President serving as Madrid tour guide to Hugo Chávez last fall? And what role did the Spanish government’s acquiescence to the chavista regime play in all of this?

Fertile ground abounds. It’s easy to step into the breach Chávez is leaving to his left and play the nationalist card. Or you could show support for the government on big issues when it gets them right to defuse the "they’re-just-naysayers" angle. Or they could stake out a Hamletian position, criticizing the process but hailing the outcome.

Many questions, numerous possibilites, silence from our side.

Google the main opposition figure heads’ names (Borges, López, Ledezma) along with Proyecto Carabobo, Repsol, or Chevron, and you get nothing. Attempts to get a statement from several opposition politicians yesterday via Twitter went unanswered.

I did see a lot of tweets, though, on Juanes and Chávez.

The failure of our opposition leaders to address critical policy issues in a timely manner is a disappointment. It speaks volumes about the professional capabilities of their operation, and raises serious doubts about how ready they are to take over the reins of the country when chavismo’s inevitable demise materializes.

But more than that, I’m disappointed at our failure as a society to demand answers from our leaders and focus on the important issues.

I guess I shouldn’t be surprised – it is Carnaval, after all – but I’m still disappointed.