The Enduring Legacy: Oil, Culture, and Society in Venezuela

"Miguel Tinker Salas’s publications have focused on oil and the enduring legacy of Venezuela’s patterns of oil exploitation. After the discovery of oil in Lake Maracaibo in 1922, US oil companies came into the country on very, very good terms for the companies themselves. Essentially, they were only paying rent on the land that they were drilling, rather than any taxes on the oil that they were actually digging out of the ground. Miguel is very interesting in discussing this process, how Venezuela entered the international oil economy on very, very unfavourable terms. And then, very similar to Coronil, he talks about how this sense of injustice—this idea that oil was very, very lucrative, but it was being exploited by somebody else, another country was profiteering—how that then feeds into oil nationalism in Venezuela and ultimately the nationalization of the oil sector in the early 1970s. But what’s really, really interesting is the research Tinker Salas has done on life in the US oil camps. They were mainly based in places like Maracaibo, which is to the west, on Venezuela’s border with Colombia. He describes the life as secure living for the Americans who were working in these enclosed camps—with very high standards of education, of healthcare and all these American facilities—and yet Venezuelans living on the outside really having no access to either the jobs—because oil is a capital-, rather than a labour-intensive industry—or to the benefits: neither the healthcare nor the education that they saw on these camps. So the camps, as Tinker Salas argues, become very influential in Venezuela’s moves towards democracy, because people saw what kind of life they could have because it was provided in these camps. The challenge Venezuela had was that it didn’t really have a national oil company to nationalize. In effect, PDVSA, the Venezuelan national oil company, is essentially a state holding company. All of the oil exploration and exploitation was done by foreign companies. So Venezuela never had that domestic production capacity. And what’s proved really quite catastrophic, up to this contemporary period, is that most of the refineries of Venezuela’s very special blend of heavy crude are all based in the United States. When nationalization did happen, more taxes and revenues came to the Venezuelan government. During this period, the president was a man called Carlos Andrés Pérez. It was a great boom period for Venezuela, with massive investments in education, healthcare, pensions, with subsidies for housing. But the catastrophe was huge. Levels of corruption ran side by side with this, and there wasn’t any real development of other economic sectors. So when the price of oil went down again in the late 1970s, Venezuela was catastrophically indebted."