News | June 16, 1999

Labor Unrest Endangers Employees

Construction work at Venezuela's largest oil refining complex was suspended indefinitely yesterday because labor unrest has endangered employees' safety, industry officials said.

The decision to cancel construction activity was made in response to weeks of protests by unions and unemployed people demanding payment of suspended salaries and the re-hiring of laid off employees. Protesters have blocked the entrance to the complex, detained oil-company executives, and seized trucks that transport liquid gas. President Hugo Chavez traveled to the region yesterday to try to solve the impasse personally.

"'We must adopt this measure to guarantee the security of workers. Until the authorities guarantee the security of the plant and of the entry routes there will be no work," said Eduardo Cartaya, spokesman for Petrozuata, one of the joint ventures shutting down. Tuesday's measure paralyzes several construction projects to add refining capacity at the complex. Actual refining is still taking place, officials said.

The paralysis could have serious social and economic consequences for Venezuela, since the complex directly and indirectly employs some 20,000 people. About 1,400 private and foreign companies depend on it. The decision affects several joint ventures at the Jose petroleum complex in eastern Venezuela, involving Venezuela's state-run oil company Petroleos de Venezuela (PDVSA), US firms Conoco and Mobil, France's Total, and Norway's Statoil.

Hugo Hernandez, vice president of the Venezuelan Petroleum Chamber, told the Associated Press that the shutdown will have a high financial cost since some $7 billion have been invested at the complex, much of it by foreigners. Venezuela, a founding member of OPEC, competes with Saudi Arabia and Mexico as the No. 1 exporter of oil to the US.