Brief History of the Role of Oil in Venezuela

This post summarizes the events and ideas laid out in The History of Venezuela by Michael Tarver and Julia C. Frederick (Palgrave McMillan: 2006). Page numbers have been given where appropriate.

When looking at Venezuela and its oil production today, it's important to have some historical knowledge of oil's role in the country's political and economic development. Venezuela currently has more proven petroleum reserves than any other Latin American country and oil revenues have been used for public work projects and loans to sympathetic nations as well as the Bretton Woods institutions. However, a percentage of the revenue has disappeared into the bank accounts of those well connected to the oil industry and petroleum has not brought an increase in the standard of living for the average Venezuelan citizen. A look back will help better understand the country's current situation.

Colonized by the Spanish in the early 1500s, by 1830 Venezuela had managed to liberate itself from the Spanish crown, initially as part of Gran Colombia (comprised of what is now Colombia, Ecuador and Venezuela) and finally breaking away as an independent nation.

Important dates in the history of Venezuelan oil

I'm currently reading The History of Venezuelan Oil by H. Michael Tarver and Julia C. Frederick (2006) and it begins with a timeline of important dates in Venezuelan history. Since our group is just beginning to research Venezuela and we have little prior knowledge of the region, I thought it would be interesting to cherry pick the Tarver/Frederick timeline for important dates in the history of oil within the country. It will be interesting to later look back at these dates and see what we can add or subtract from the list, once we have a bit more research under our belts.

• 1914 - discovery of first oil field in Venezuela with the drilling of the Zumaque-1 oil well. The oil field was christened Mene Grande.


• 1918 - massive oil exploitation begins


• 1926 - oil becomes the #1 Venezuelan export (note: it would be interesting to look a history of where oil exports from Venezuela have gone over the years)


• 1948 - first democratically elected government in power, led by Romulo Gallegos. Overthrown by military coup in the same year. The miliary regime that followed was brutally led by Coronel Marcos Perez Jimenez (note from Daniel Yergin's The Prize (1992) is that oil production advanced rapidly during the years of the military regime (pg. 510)).


• 1958 - Perez Jimenez' dictatorship overthrown and the military has since withdrawn from Venezuelan politics and there has been relatively continuous civil democratic rule.


• 1973 - Venezuela benefits from oil boom as Bolivars begin to peak against the dollar.


• 1976 - The petroleum industry is nationalized


• 1983-4 - low oil prices cause cuts in state spending to be made


• 1989 - "Caracozo" in Caracas. 200 people are killed in rioting that protests government's austerity plans


• 2000 - Chavez elected to 6 year term following modifications to the constitution in 1999.


• 2002 - Chavez appoints a new board of directors to Petroleos de Venezuela (PDVSA) in an attempt to gain more control of the industry. The industry is opposed to the change and executives strike in April, supported by the trade unions. There are clashes between the strikers and the National Guardsmen in which 10 people are killed. Chavez shuts down the media to minimize coverage of the violence. The military demands that Chavez resign, which he does on April 12, but returns two days later. The strike by the opposition calling for his resignation cripples the oil industry and leads to fuel shortages in the country.


• 2003 - The strike ends in February with a deal brokered by the Organization of American States (OAS) and a framework is st for a referendum on Chavez' rule.


• 2004 - There is a class over the referendum and allegedly false signatures


• 2005 - Chavez continues to antagonize the United States as oil prices increase and the Bolivar is devalued, causing inflation (Dutch disease)