U.S. oil supplier announces strike

CARACAS, Venezuela -- Venezuela's largest labor group said Saturday it will hold a one-day general strike to support protesting oil executives -- a dispute that is already disrupting exports by one of the United States' biggest petroleum suppliers.

The 1 million-member Venezuelan Workers Confederation will strike on Tuesday -- and extend the strike if necessary -- to support managers at Petroleos de Venezuela, confederation president Carlos Ortega said.

The labor group paralyzed Venezuela with a one-day strike against President Hugo Chavez's economic policies on Dec. 10.

There was no immediate reaction from Chavez's government.

Managers at Petroleos de Venezuela revolted when Chavez tried to tighten control over the state-owned company, and their strike continued for a third day Saturday with protests outside offices in Caracas and Puerto La Cruz. The protesting workers closed two of Venezuela's five major loading terminals Friday, stranding a dozen ships waiting to load cargo.

On Thursday, a clash between government supporters and opposition party members at a drilling site killed two oil workers and injured three.

The unrest has shocked admirers of the company, long an icon of efficiency in a nation plagued by public and private sector corruption.

Also known as PDVSA, it oversees Venezuela's greatest resource -- crude oil reserves that are the largest outside the Middle East. Oil provides a third of the nation's $110 billion gross domestic product, 80 percent of export earnings and half of government income.

The company has become a multinational giant. Its holdings include a majority stake in the western hemisphere's largest refinery, in the U.S. Virgin Islands, as well as Citgo Corp.'s line of gasoline stations.

Venezuelan governments respected PDVSA's autonomy -- until Chavez, an ex-army officer who led a failed 1992 coup attempt, was elected on an anti-poverty, anti-corruption platform in 1998. He made taking control of the oil industry a central goal.

"Employees believed they could develop a successful career without worrying about political interference," said Alberto Quiros, an oil industry analyst and former president of Shell Venezuela. "All that changed when Hugo Chavez took power."

Accusing executives of owning luxurious chalets in the Venezuelan Andes and other excesses, Chavez says the company's costs must be cut and its benefits spread to the 80 percent of Venezuelans who live in poverty. Executives deny they are overpaid and note that their counterparts at Exxon Mobil Corp. make ten times more than PDVSA's top managers.

Installed loyalist board

On Feb. 25, Chavez installed a loyalist board of directors and leftist economist Gaston Parra as president, outraging executives. Parra had criticized company policies for two decades.

Hundreds of managers want the appointments rescinded. Chavez's changes, they argue, are based on political affiliation rather than merit.

After more than a month of negotiations, the government's refusal on Thursday to reinstate two dissident executives who were forced to retire prompted management to take radical action.

Defiant executives say their protest will continue until five of the executive board's seven members step down. Chavez, in turn, threatens massive firings.