Oil output tops 1 million barrels, marks turning point in strike
CARACAS, Venezuela President Hugo Chavezs government scored a victory in Venezuelas political crisis by producing more than 1 million barrels of oil Tuesday, frustrating a 2-month-old opposition drive to strangle the worlds No. 5 oil exporter.
By raising production to a third of its normal rate, Chavez seized another advantage over his opponents jump-starting Venezuelas oil industry while defeating calls for a February referendum on his rule.
But the 58-day-old strike has put Venezuela on the verge of economic collapse, caused long-term damage to the oil infrastructure and forced Chavez to extend his ban Tuesday on U.S. dollar purchases to preserve foreign reserves.
Energy analysts warn that Venezuela has lost production capacity during the strike and that it could take months to restore it. Refining is curtailed, and Venezuela is purchasing its gasoline abroad.
Dissident executives at the state oil monopoly, Petroleos de Venezuela S.A., confirmed production surpassed 1 million barrels, compared to a low of 200,000 during the strike.
Oil provides half of Venezuelas government revenue and 70 percent of export earnings.
Chavez has fired more than 5,000 striking workers at the state oil monopoly, which employed 40,000, eliminating dissent
Opposition leaders insist the oil strike will continue. But they are scaling back in other areas, worried about a public backlash over food, gasoline and medicine shortages.
Most small businesses are open either because they never joined the strike or because they couldnt sustain losses.
Factories, shopping malls, restaurants and schools may reopen next week, at least on a part-time basis, said Julio Brazon, president of the Consecomercio business chamber and a strike leader.
Citing political and economic turmoil, Venezuelas opposition called the strike Dec. 2 to force Chavez to call a nonbinding referendum on his rule in February. They delivered 2 million signatures demanding the vote.
Last week, Venezuelas Supreme Court postponed the referendum indefinitely, citing a technicality. Chavezs foes are now gathering voter signatures to demand an amendment to reduce the presidents six-year term to four years allowing an early binding referendum on his rule.